Market power in California's water market

Françeska Tomori, Erik Ansink, Harold Houba, Nick Hagerty and Charles Bos

American Journal of Agricultural Economics, 2024, vol. 106, issue 3, 1274-1299

Abstract: We estimate market power in California's surface water market. Market power may distort the potential welfare gains from water marketing. We use a Nash‐Cournot model and derive a closed‐form solution for the extent of market power in a water market setting. We then use this solution to estimate market power in a newly assembled dataset on California's water economy. We show that, under the assumptions of the Nash‐Cournot model, market power in this thin market is limited.

Date: 2024
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https://doi.org/10.1111/ajae.12434

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Working Paper: Market power in California's water market (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:ajagec:v:106:y:2024:i:3:p:1274-1299

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