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| Author: | Rubio, S. J. Casino, B. |
| Title: | Strategic behavior and efficiency in the common property extraction of groundwater |
| Journal: | Environmental and Resource Economics
2003 : SEP, VOL. 26:1, p. 73-87 |
| Index terms: | Environmental economics Water resources Strategic management Welfare economics Stochastic processes |
| Language: | eng |
| Abstract: | Externalities that erise from private exploitation of groundwater are analyzed by comparing socially optimal and private extraction. Open-loop Nash equilibrium and stationary Markov feedback equilibrium in nonlinear startegies have been computed to characterize private extraction. The results show that strategic behaviour increases the overexploitation of the aquifer. However, if the groundwater storage capacity is large, the difference between the socially optimal and private extraction is negligible. |
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