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How do Markets Manage Water Resources? An Experiment

Aurora García-Gallego (), Nikolaos Georgantzís (), Roberto Hernán-González () and Praveen Kujal ()
Authors registered in the RePEc Author Service: Roberto Hernán González ()

Environmental & Resource Economics, 2012, vol. 53, issue 1, 23 pages

Abstract: We experimentally test how a private monopoly, a duopoly and a public utility allocate water of differing qualities to households and farmers. Most of our results are in line with the theoretical predictions. Overexploitation of the resources is observed independently of the market structure. Stock depletion for the public utility is the fastest, followed by the private duopoly and private monopoly. On the positive aspects of centralized public management, we find that the average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly. Copyright Springer Science+Business Media B.V. 2012

Keywords: Resource overexploitation; Public utility; Private monopoly; Duopoly; Water quality; Experiments (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s10640-012-9545-7

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