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Rainwater harvesting and groundwater conservation: when endogenous heterogeneity matters

Raphael Soubeyran (), Mabel Tidball (), Agnes Tomini and Katrin Erdlenbruch ()

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Abstract: In this paper, we focus on resource conservation in a model of decentralized management of groundwater and rainwater. We show that a conservation policy may have opposite effects on the level of the resource, depending on the outcome of the decentralized management. More precisely, we consider identical farmers who can use two water resources (groundwater and/or rainwater) and we study the symmetric and asymmetric feedback stationary Nash equilibria of the dynamic game. We show that a subsidy on the use of rainwater may increase the level of the aquifer at the symmetric equilibrium, whereas it decreases the level of the aquifer at the asymmetric equilibrium. This suggests that the usual focus on (interior) symmetric equilibria in dynamic games may provide misleading policy implications.

Keywords: rainwater; asymmetric equilibrium; differential game; groundwater (search for similar items in EconPapers)
Date: 2015-09
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Published in Environmental and Resource Economics, Springer, 2015, 62 (1), pp.19-34. ⟨10.1007/s10640-014-9813-9⟩

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Journal Article: Rainwater Harvesting and Groundwater Conservation: When Endogenous Heterogeneity Matters (2015) Downloads
Working Paper: Rainwater Harvesting and Groundwater Conservation: When Endogenous Heterogeneity Matters (2015)
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