Standard economic models of groundwater management impose restrictive assumptions regarding perfect transmissivity (i. e., the aquifer behaves as a bathtub), no external effects of groundwater stocks, observability of individual extraction rates, and/or homogeneous agents. In this article, we derive regulatory mechanisms for inducing the socially optimal extraction path in Markov perfect equilibrium for aquifers in which these assumptions do not hold. In spite of the complexity of the underlying system, we identify an interesting case in which a simple linear mechanism achieves the social optimum. To illustrate potential problems that can arise by erroneously imposing simplifying assumptions, we conduct a simulation based on data from the Indian state of Andhra Pradesh. © 2011 US Government.

Athanasoglou, S., Sheriff, G., Siegfried, T., Huh, W. (2012). Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers. ENVIRONMENTAL & RESOURCE ECONOMICS, 52(2), 265-291 [10.1007/s10640-011-9528-0].

Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers

ATHANASOGLOU, STERGIOS;
2012

Abstract

Standard economic models of groundwater management impose restrictive assumptions regarding perfect transmissivity (i. e., the aquifer behaves as a bathtub), no external effects of groundwater stocks, observability of individual extraction rates, and/or homogeneous agents. In this article, we derive regulatory mechanisms for inducing the socially optimal extraction path in Markov perfect equilibrium for aquifers in which these assumptions do not hold. In spite of the complexity of the underlying system, we identify an interesting case in which a simple linear mechanism achieves the social optimum. To illustrate potential problems that can arise by erroneously imposing simplifying assumptions, we conduct a simulation based on data from the Indian state of Andhra Pradesh. © 2011 US Government.
Articolo in rivista - Articolo scientifico
Common property resource; Differential games; Groundwater extraction; Imperfect monitoring; Markov perfect equilibrium; Management, Monitoring, Policy and Law; Aerospace Engineering
English
2012
52
2
265
291
none
Athanasoglou, S., Sheriff, G., Siegfried, T., Huh, W. (2012). Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers. ENVIRONMENTAL & RESOURCE ECONOMICS, 52(2), 265-291 [10.1007/s10640-011-9528-0].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/139995
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