Groundwater Usage and Strategic Complements: Part I (Instrumental Variables)

Caleb M. Koch and Heinrich H. Nax ()
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Caleb M. Koch: Computational Social Science, Department of Humanities, Social and Political Sciences, ETH Zürich, 8050 Zürich, Switzerland
Heinrich H. Nax: Behavioral Game Theory, Department of Humanities, Social and Political Sciences, ETH Zürich, 8050 Zürich, Switzerland

Games, 2022, vol. 13, issue 5, 1-19

Abstract: We test whether the decisions in a common-pool resource game are better modeled game-theoretically as strategic substitutes or complements using an individual-level dataset of groundwater usage that accounts for 3% of US irrigated agriculture. Based on a regression framework with instrumental variables, we find support for strategic complements, suggesting that reciprocity– and/or race-to-depletion–like dynamics are key to understanding groundwater usage.

Keywords: common-pool resources; US agriculture; groundwater; dynamic game theory; panel data; identification (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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