Computing Alternating Offers and Water Prices in Bilateral River Basin Management

Harold Houba

No 06-095/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This discussion paper resulted in an article in the International Game Theory Review (2008), 10, 257-278.

This contribution deals with the fundamental critique in Dinar et al. (1992, Theory and Decision 32) on the use of Game theory in water management: People are reluctant to monetary transfers unrelated to water prices and game theoretic solutions impose a computational burden. For the bilateral alternating-offers model, a single optimization program significantly reduces the computational burden. Furthermore, water prices and property rights result from exploiting the Second Welfare Theorem. Both issues are discussed and applied to a bilateral version of the theoretical river basin model in Ambec and Sprumont (2002). Directions for future research are provided.

Keywords: International River Management; Negotiation Theory; Game Theory; Computations; Non-transferable utility; Property rights; Walrasian equilibrium prices; Applied General Equilibrium model (search for similar items in EconPapers)
JEL-codes: C72 C78 D50 D58 (search for similar items in EconPapers)
Date: 2006-10-06
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Related works:
Journal Article: COMPUTING ALTERNATING OFFERS AND WATER PRICES IN BILATERAL RIVER BASIN MANAGEMENT (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20060095

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