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Sharing a River

Author

Listed:
  • AMBEC, Steve
  • SPRUMONT, Yves
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 our 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 vector in the core satisfies this condition : it is the 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, Steve & SPRUMONT, Yves, 2000. "Sharing a River," Cahiers de recherche 2000-08, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:2000-08
    as

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    File URL: http://hdl.handle.net/1866/332
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    References listed on IDEAS

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    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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    More about this item

    Keywords

    common orty resources; fair allocation; core;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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