Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26222
Authors: 
Sgobbi, Alessandra
Carraro, Carlo
Year of Publication: 
2007
Series/Report no.: 
CESifo working paper 2178
Abstract: 
The objective of this paper is to investigate the usefulness of non-cooperative bargaining theory for the analysis of negotiations on water allocation and management. We explore the impacts of different economic incentives, a stochastic environment and varying individual preferences on players' strategies and equilibrium outcomes through numerical simulations of a multilateral, multiple issues, non-cooperative bargaining model of water allocation in the Piave River Basin, in the North East of Italy. Players negotiate in an alternating-offer manner over the sharing of water resources (quantity and quality). Exogenous uncertainty over the size of the negotiated amount of water is introduced to capture the fact that water availability is not known with certainty to negotiating players. We construct the players' objective function with their direct input. We then test the applicability of our multiple players, multi-issues, stochastic framework to a specific water allocation problem and conduct comparative static analyses to assess sources of bargaining power. Finally, we explore the implications of different attitudes and beliefs over water availability.
Subjects: 
bargaining
non-cooperative game theory
simulation models
uncertainty
JEL: 
C61
C71
C78
Document Type: 
Working Paper

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