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The Economics of Transboundary River Management

Author

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  • Erik Ansink

    (VU University Amsterdam)

  • Harold Houba

    (VU University Amsterdam)

Abstract

We survey the economics of transboundary river water allocation, which emerged in the 1960s and has matured over the last decade due to increasing concerns over water scarcity and pollution. We outline the major approaches and pay specific attention to the strategic aspects of transboundary river water allocation. These strategic aspects are captured by employing game theory to assess the economics of transboundary river water allocation in a simple model of river sharing. This model allows us to show how conflict and cooperation over transboundary water resources may occur. It also allows us to pay specific attention to the efficiency, sustainability, and fairness of solutions to this model. We compare and contrast both cooperative and non-cooperative approaches and we relate their solutions to illustrative examples.

Suggested Citation

  • Erik Ansink & Harold Houba, 2014. "The Economics of Transboundary River Management," Tinbergen Institute Discussion Papers 14-132/VIII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20140132
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    References listed on IDEAS

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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. Lea Melnikovová, 2017. "Can Game Theory Help to Mitigate Water Conflicts in the Syrdarya Basin?," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(4), pages 1393-1401.
    3. 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.
    4. 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.
    5. Dagmawi Mulugeta Degefu & Weijun He & Liang Yuan & An Min & Qi Zhang, 2018. "Bankruptcy to Surplus: Sharing Transboundary River Basin’s Water under Scarcity," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(8), pages 2735-2751, June.

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    More about this item

    Keywords

    River sharing problem; River claims problem; Fairness; Efficiency; Sustainability; Water allocation agreement; Bargaining; Water trade; Sharing rules; Axiomatic approach;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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