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Water sharing and equity-efficiency trade-offs: Evidence from a lab-in-the-field experiment in India

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Listed:
  • Ouvrard, Benjamin
  • Reynaud, Arnaud
  • Cezera, Stéphane
  • Thomas, Alban
  • James, Dishant Jojit
  • Shivamurthy, Murudaiah

Abstract

We conduct a lab-in-the-field experiment to analyze the preferences of Indian farmers (Karnataka state) regarding surface water sharing. To elicit impartial social preferences, we implement a dictator game behind the veil of ignorance in which a limited quantity of water has to be allocated between two farmers which differ in terms of location (upstream versus downstream) and water productivity. We first show that subjects express preferences for allocating less water to the downstream farmer. Next, we demonstrate that a majority of subjects’ decisions are consistent with efficient, egalitarian in payoff or egalitarian in quantity behaviors. Last, more efficient water allocation behaviors can be induced by modifying subjects’ choice architecture. For instance, a loss framing is shown to induce subjects to share more efficiently the water resource, but only when the most productive farmer is located downstream.

Suggested Citation

  • Ouvrard, Benjamin & Reynaud, Arnaud & Cezera, Stéphane & Thomas, Alban & James, Dishant Jojit & Shivamurthy, Murudaiah, 2025. "Water sharing and equity-efficiency trade-offs: Evidence from a lab-in-the-field experiment in India," Resource and Energy Economics, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:resene:v:83:y:2025:i:c:s092876552500034x
    DOI: 10.1016/j.reseneeco.2025.101510
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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