Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2021-01-24
Number: 21-011/VIII
Author-Name: Françeska Tomori
Author-Workplace-Name: Universitat Rovira i Virgili
Author-Name: Erik Ansink
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Harold Houba
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Nick Hagerty
Author-Workplace-Name: Montana State University
Author-Name: Charles Bos
Author-Workplace-Name: Vrije Universiteit Amsterdam
Title: Market power in California's water market
Abstract: We estimate market power in California's thin water market. Market frictions may distort the potential welfare gains from water marketing. We use a Nash-Cournot model and derive a closed-form solution for the extent of market power in a typical water market setting. We then use this solution to estimate market power in a newly assembled dataset on California's water economy. We show that, under the assumptions of the Cournot model, market power in this thin market is limited.	
Classification-JEL: C72, D43, Q25
Keywords: Water markets, Market power, California, Cournot-Nash
File-URL: https://papers.tinbergen.nl/21011.pdf
File-Format: application/pdf
File-Size: 388006 bytes
Handle: RePEc:tin:wpaper:20210011