EFFICACY OF WATER TRADING UNDER ASYMMETRIC INFORMATION AND IMPLICATIONS FOR TECHNOLOGY ADOPTION

Chokri Dridi and Madhu Khanna

No 22140, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The purpose of this paper is to develop a water allocation and technology adoption model under the prior appropriation doctrine that recognizes informational asymmetry among water users and between water users and water authorities. We consider informational asymmetry about the agent's type, defined by a mix of land quality and knowledge. Adverse selection is found to significantly reduce the adoption of modern irrigation technology and to lead to less retirement of poor quality lands than under full information. Further investigation shows that even with asymmetric information, incentives for water trades can exist and lead to additional technology adoption with gains to all parties. Our results suggest that under asymmetric information, even a thin secondary market can improve the allocation of water resources.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 34
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/22140/files/sp03dr01.pdf (application/pdf)

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:ags:aaea03:22140

DOI: 10.22004/ag.econ.22140

Access Statistics for this paper

More papers in 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().