TY  - RPRT
AB  - 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 homogenous 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.
AU  - Athanassoglou, Stergios
AU  - Sheriff, Glenn
AU  - Siegfried, Tobias
AU  - Tim Huh, Woonghee
DA  - 2011-03
DA  - 2011-03
DO  - 10.22004/ag.econ.102502
DO  - doi
ID  - 102502
KW  - Environmental Economics and Policy
KW  - Common Property Resource
KW  - Differential Games
KW  - Groundwater Extraction
KW  - Imperfect Monitoring
KW  - Markov Perfect Equilibrium
L1  - https://ageconsearch.umn.edu/record/102502/files/NDL2011-028.pdf
L2  - https://ageconsearch.umn.edu/record/102502/files/NDL2011-028.pdf
L4  - https://ageconsearch.umn.edu/record/102502/files/NDL2011-028.pdf
LA  - eng
LA  - English
LK  - https://ageconsearch.umn.edu/record/102502/files/NDL2011-028.pdf
N2  - 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 homogenous 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.
PY  - 2011-03
PY  - 2011-03
T1  - Optimal Mechanisms for Heterogeneous Multi-cell Aquifers
TI  - Optimal Mechanisms for Heterogeneous Multi-cell Aquifers
UR  - https://ageconsearch.umn.edu/record/102502/files/NDL2011-028.pdf
Y1  - 2011-03
T2  - SD
T2  - 28.2011
ER  -