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River coalitions and water trade

Author

Listed:
  • Erik Ansink
  • Michael Gengenbach
  • Hans-Peter Weikard

Abstract

We analyse coalition stability in a game with a spatial structure. We consider a set of agents located along a river who abstract scarce water for their own benefit. Agents may enter an agreement to mutually acknowledge property rights in river water as a prerequisite for water trade. We find that the potential benefits of water trade may not be sufficient to make all agents in the river cooperate and sign an agreement. Specifically, a complete market for river water may not emerge if there are four or more agents along the river. This result is driven by the spatial structure of our game, in which water that is to be delivered to a downstream coalition member via the territory of an intermediate singleton can be seized.

Suggested Citation

  • Erik Ansink & Michael Gengenbach & Hans-Peter Weikard, 2017. "River coalitions and water trade," Oxford Economic Papers, Oxford University Press, vol. 69(2), pages 453-469.
    • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:2:p:453-469.
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    File URL: http://hdl.handle.net/10.1093/oep/gpw074
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    Citations

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    Cited by:

    1. Li, Zhi & Zhang, Xin & Xu, Wenchao, 2018. "Water Transactions along a River: A Multilateral Bargaining Experiment with a Veto Player," 2018 Annual Meeting, August 5-7, Washington, D.C. 274048, Agricultural and Applied Economics Association.
    2. Gudmundsson, Jens & Hougaard, Jens Leth & Ko, Chiu Yu, 2019. "Decentralized mechanisms for river sharing," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 67-81.
    3. Jorge Alcalde-Unzu & María Gómez-Rúa & Elena Molis, 2021. "Allocating the costs of cleaning a river: expected responsibility versus median responsibility," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(1), pages 185-214, March.
    4. Xia Xu & Fengping Wu & Qianwen Yu & Xiangnan Chen & Yue Zhao, 2022. "Analysis on Management Policies on Water Quantity Conflict in Transboundary Rivers Embedded with Virtual Water—Using Ili River as the Case," Sustainability, MDPI, vol. 14(15), pages 1-19, August.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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