Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2006-10-06
Number: 06-095/1
Author-Name: Harold Houba
Author-Email: hhouba@feweb.vu.nl
Author-Workplace-Name: Vrije Universiteit Amsterdam
Title: Computing Alternating Offers and Water Prices in Bilateral River Basin Management
Abstract: This discussion paper resulted in an article in the <I>International Game Theory Review</I> (2008), 10, 257-278.<P>

This contribution deals with the fundamental critique in Dinar et al. (1992, Theory and Decision 32) on the use of Game theory in water management: People are reluctant to monetary transfers unrelated to water prices and game theoretic solutions impose a computational burden. For the bilateral alternating-offers model, a single optimization program significantly reduces the computational burden. Furthermore, water prices and property rights result from exploiting the Second Welfare Theorem. Both issues are discussed and applied to a bilateral version of the theoretical river basin model in Ambec and Sprumont (2002). Directions for future research are provided.
Classification-JEL: C72; C78; D50; D58
Keywords: International River Management; Negotiation Theory; Game Theory; Computations; Non-transferable utility; Property rights; Walrasian equilibrium prices; Applied General Equilibrium model
File-Url: https://papers.tinbergen.nl/06095.pdf
File-Format: application/pdf
File-Size: 529381 bytes
Handle: RePEc:tin:wpaper:20060095