Do Security-differentiated Water Rights Improve Efficiency?

Marianne Lefebvre (), Lata Gangadharan () and Sophie Thoyer ()

Working Papers from LAMETA, Universtiy of Montpellier

Abstract: Most existing water markets combine water rights trading and water allocation trading. Offering different levels of security for rights can make the market more sophisticated and allow water users to manage the risks of supply uncertainty better. We compare results from a laboratory experiment with two water right designs, one with a unique security level and another with two security levels. We find that a two security levels system improves both allocative eciency and risk management, but only when transactions costs are higher in the market for water allocation than in the market for water rights.

Keywords: Crude Oil Pricing; Currency Basket; OPEC; Exchange Rate of Dollar; Euros; Yen. (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-06, Revised 2012-06
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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