A groundwater market model

Igor Cialenco and Michael Ludkovski

Papers from arXiv.org

Abstract: We introduce the problem of groundwater trading, capturing the emergent groundwater market setups among stakeholders in a given groundwater basin. The agents optimize their production, taking into account their available water rights, the requisite water consumption, and the opportunity to trade water among themselves. We study the resulting Nash equilibrium, providing a full characterization of the 1-period setting and initial results about the features of the multi-period game driven by the ability of agents to bank their water rights in order to smooth out the intertemporal shocks.

Date: 2025-01
New Economics Papers: this item is included in nep-gth and nep-reg
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