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Sharing a River

Author

Listed:
  • Ambec, S.
  • Sprumont, Y.
Abstract
A group of agents located along a river have quasi-linear preferences over water and money. We ask how the water should be allocated and what money transfers should be performed. We are interested in efficiency, stability (in the sense of the core), and fairness (in a sense to be defined). We first show that the cooperative game associated with that problem is convex: its core is therefore large and easily described. Next, we propose the following fairness requirement: no group of agents should enjoy a welfare higher than what it could achieve in the absence of the remaining agents. We prove that only one welfare distribution in the core satisfies this condition: its marginal contribution vector corresponding to the ordering of the agents along the river. We discuss how it could be decentralized or implemented.

Suggested Citation

  • Ambec, S. & Sprumont, Y., 2000. "Sharing a River," Papers 00-06, Laval - Recherche en Energie.
    • Handle: RePEc:fth:lavaen:00-06
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    References listed on IDEAS

    as
    1. Hervé Moulin, 1990. "Joint Ownership of a Convex Technology: Comparison of Three Solutions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 439-452.
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    5. Barret, Scott & DEC, 1994. "Conflict and cooperation in managing international water resources," Policy Research Working Paper Series 1303, The World Bank.
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    More about this item

    Keywords

    NATURAL RESOURCES ; RESOURCE ALLOCATION;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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