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Sharing a river among satiable countries

Author

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  • Ambec, S.
  • Ehlers, L.

Abstract

With diminishing global water reserves the problem of water allocation becomes increasingly important. We consider the problem of efficiently sharing a river among a group of satiable countries. Inducing countries to efficiently cooperate requires monetary compensations via international agreements. We show that cooperation of the other countries exerts a positive externality on the benefit of a coalition. Our problem is to distribute the benefit of efficiently sharing the river under these constraints. If the countries outside of a coalition do not cooperate at all, then the downstream incremental distribution is the unique compromise between the absolute territorial sovereignty (ATS) doctrine and the unlimited territorial integrity (UTI) doctrine. If all countries outside a coalition cooperate, then there may not exist any distribution satisfying the UTI doctrine.

Suggested Citation

  • Ambec, S. & Ehlers, L., 2006. "Sharing a river among satiable countries," Working Papers 200605, Grenoble Applied Economics Laboratory (GAEL).
  • Handle: RePEc:gbl:wpaper:200605
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    File URL: https://gael.univ-grenoble-alpes.fr/sites/gael/files/doc-recherche/WP/A2006/gael2006-08.pdf
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    References listed on IDEAS

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    1. Maniquet, Francois, 2003. "A characterization of the Shapley value in queueing problems," Journal of Economic Theory, Elsevier, vol. 109(1), pages 90-103, March.
    2. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(3), pages 379-401.
    3. Gabrielle Demange, 2004. "On Group Stability in Hierarchies and Networks," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 754-778, August.
    4. Moulin, Herve, 1990. "Uniform externalities : Two axioms for fair allocation," Journal of Public Economics, Elsevier, vol. 43(3), pages 305-326, December.
    5. Geoffroy de Clippel & Roberto Serrano, 2008. "Marginal Contributions and Externalities in the Value," Econometrica, Econometric Society, vol. 76(6), pages 1413-1436, November.
    6. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    7. Macho-Stadler, Ines & Perez-Castrillo, David & Wettstein, David, 2007. "Sharing the surplus: An extension of the Shapley value for environments with externalities," Journal of Economic Theory, Elsevier, vol. 135(1), pages 339-356, July.
    8. D. Kilgour & Ariel Dinar, 2001. "Flexible Water Sharing within an International River Basin," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 43-60, January.
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    Cited by:

    1. d'Albis, Hippolyte & Ambec, Stefan, 2010. "Fair intergenerational sharing of a natural resource," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 170-183, March.

    More about this item

    Keywords

    WATER ALLOCATION; EXTERNALITIES;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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