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A Stochastic Multiple Players Multi-Issues Bargaining Model for the Piave River Basin

Author

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  • Sgobbi, Alessandra
  • Carraro, Carlo

Abstract

This paper investigates the usefulness of non-cooperative bargaining theory for the analysis of negotiations on water allocation and management. It explores the impacts of different economic incentives, of a stochastic environment and of varying individual preferences on players' strategies and equilibrium outcomes. The analysis is based on numerical simulations of a multilateral, multiple issues, non-cooperative bargaining model of water allocation in the Piave River Basin, located in the North East of Italy. Players negotiate in an alternating offer manner over the sharing of water resources. Exogenous uncertainty over the size of the negotiated amount of water is introduced to capture the fact that water availability is not known with certainty to negotiating players. We construct the players' objective function with their direct input. The applicability of our multiple players, multi-issues, stochastic framework is tested through several comparative statics exercises designed to assess the influence of different sources of bargaining power. Finally, the implications of different attitudes and beliefs over water availability are explored.

Suggested Citation

  • Sgobbi, Alessandra & Carraro, Carlo, 2011. "A Stochastic Multiple Players Multi-Issues Bargaining Model for the Piave River Basin," Strategic Behavior and the Environment, now publishers, vol. 1(2), pages 119-150, April.
    • Handle: RePEc:now:jnlsbe:102.00000006
    DOI: 10.1561/102.00000006
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    Cited by:

    1. Carmen Marchiori, 2010. "Concern for Fairness and Incentives in Water Negotiations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(4), pages 553-571, April.
    2. Dagmawi Mulugeta Degefu & Weijun He & Liang Yuan, 2017. "Monotonic Bargaining Solution for Allocating Critically Scarce Transboundary Water," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(9), pages 2627-2644, July.
    3. Henry Penikas & Yulia Titova, 2012. "Modeling Policy Response to Global Systemically Important Banks Regulation," HSE Working papers WP BRP 02/FE/2012, National Research University Higher School of Economics.
    4. Alban Thomas & Vera Zaporozhets, 2017. "Bargaining Over Environmental Budgets: A Political Economy Model with Application to French Water Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 227-248, October.
    5. Janjua, Shahmir & An-Vo, Duc-Anh & Reardon-Smith, Kathryn & Mushtaq, Shahbaz, 2024. "Resolving water security conflicts in agriculture by a cooperative Nash bargaining approach," Agricultural Water Management, Elsevier, vol. 306(C).

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    Keywords

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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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