Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330047 
Year of Publication: 
2023
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 14 [Issue:] 4 [Article No.:] 54 [Year:] 2023 [Pages:] 1-9
Publisher: 
MDPI, Basel
Abstract: 
Market power in water markets can be modeled as simultaneous quantity competition on a river structure and analyzed by applying social equilibrium. In an example of a duopoly water market, we argue that the lack of backward induction logic implies that the upstream supplier foregoes profitable strategic manipulation of water to the downstream supplier. To incorporate backward induction, we propose the Stackelberg social equilibrium concept. We prove the existence of Stackelberg social equilibrium in duopoly water markets with an upstream-downstream river structure and derive it in the example of a duopoly market.
Subjects: 
water markets
market power
Stackelberg social equilibrium
social equilibrium
duopoly
JEL: 
C72
D43
Q25
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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