Market power in water markets

Erik Ansink and Harold Houba

Journal of Environmental Economics and Management, 2012, vol. 64, issue 2, 237-252

Abstract: We model market power in water markets as multi-market Cournot competition with a river structure. Suppliers are connected through water balances, which imposes resource constraints, and they are connected to heterogeneous water users via a water delivery infrastructure. Our model captures a wide range of specific water market structures. We establish conditions for existence of an equilibrium and we assess the effects of market power on water extraction, delivery, and water prices. Although the monopoly case is similar to standard economic theory, three other specific water market structures illustrate that standard intuition has to be revisited.

Keywords: Water markets; Oligopoly; Market power; Cournot–Walras equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D43 Q25 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Market Power in Water Markets (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:64:y:2012:i:2:p:237-252

DOI: 10.1016/j.jeem.2011.10.002

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