A solution for the flood cost sharing problem

Anand Abraham and Parthasarathy Ramachandran

Economics Letters, 2020, vol. 189, issue C

Abstract: In this study, we model and study the flood cost sharing problem on a successive transboundary river shared between n-riparian states. We propose a Sequential Upstream Proportional Allocation (SUPA) solution and axiomatically characterise it. We make use of the Extended Producer Responsibility principle to define a characteristic form game which models cooperative behaviour among riparian states. We show that the proposed sharing rule coincides with the Shapley value of this game. The proposed allocation is also a member of the Core of the game.

Keywords: Cost sharing; Transboundary floods; River sharing problem; Shapley value (search for similar items in EconPapers)
JEL-codes: C71 D62 Q54 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:189:y:2020:i:c:s0165176520300495

DOI: 10.1016/j.econlet.2020.109030

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