Groundwater Exploitation and Illegal Behaviors in a Differential Game

Marta Biancardi, Gianluca Iannucci () and Giovanni Villani
Additional contact information
Marta Biancardi: University of Bari
Giovanni Villani: University of Bari

Dynamic Games and Applications, 2022, vol. 12, issue 3, No 11, 996-1009

Abstract: Abstract This paper studies groundwater management through a leader–follower differential game between a water agency and farmers. The access to the common pool is not free and farmers have to pay a water tax to withdraw. To save this cost, we assume that farmers may not declare all the water pumped and face the risk of being sanctioned. The water agency, on the other hand, knows that unauthorized water extraction may occur and chooses the water tax that maximizes only the legal social welfare. The value of the farmers’ evasion share is unknown ex-ante by the water agency. The game is solved using feedback Nash solution. To understand how the water agency may counter illegal behaviors, we perform numerical simulations based on the Western La Mancha (Spain) aquifer data. It emerges that the optimal path of the water table is always above the minimum level, although it is sensitive to the level of the ecosystem costs. Moreover, increasing the administrative sanction reduces the unauthorized water extraction and raises the social welfare.

Keywords: Leader–follower differential game; Groundwater management; Unauthorized water extraction; Feedback solution (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s13235-022-00436-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:dyngam:v:12:y:2022:i:3:d:10.1007_s13235-022-00436-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13235

DOI: 10.1007/s13235-022-00436-0

Access Statistics for this article

Dynamic Games and Applications is currently edited by Georges Zaccour

More articles in Dynamic Games and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().