Market power in California’s water market

Françeska Tomori, Erik Ansink, Harold Houba, Nick Hagerty and Charles Bos

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: We estimate market power in California’s thin water market. Market frictions may distort the potential welfare gains from water marketing. We use a Nash-Cournot model and derive a closed-form solution for the extent of market power in a typical water market setting. We then use this solution to estimate market power in a newly assembled dataset on California’s water economy. We show that, under the assumptions of the Cournot model, market power in this thin market is limited. Keywords: Water markets, Market power, California, Cournot-Nash. JEL classification: C72, D43, Q25

Keywords: Aigua--Preus; 338 - Situació econòmica. Política econòmica. Gestió; control i planificació de l'economia. Producció. Serveis. Turisme. Preus (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/534854

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