Sharing a river with downstream externalities

Sharing a river with downstream externalities

We consider the problem of efficient emission abatement in a multi polluter setting, where agents are located along a river in which net emissions accumulate and induce negative externalities to downstream riparians. Assuming a cooperative transferable utility game, we seek welfare distributions tha...

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Bibliographic Details
Published in:Games Vol. 10; no. 2; pp. 1 - 15
Main Authors: Steinmann, Sarina, Winkler, Ralph
Format: Journal Article
Language:English
Published: Basel MDPI 01-06-2019
MDPI AG
Subjects:
Bankruptcy
Consumption
Cooperation
Cost function
Costs
Damage
downstream externalities
downstream incremental distribution
Economic models
Emissions
Game theory
Games
Inequality
Jurisdiction
Lower bounds
optimal emission abatement
Optimization
Pollution
Pollution levels
Principles
Public good
river pollution
Rivers
Upper bounds
Switzerland
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Summary:We consider the problem of efficient emission abatement in a multi polluter setting, where agents are located along a river in which net emissions accumulate and induce negative externalities to downstream riparians. Assuming a cooperative transferable utility game, we seek welfare distributions that satisfy all agents' participation constraints and, in addition, a fairness constraint implying that no coalition of agents should be better off than it were if all non-members of the coalition would not pollute the river at all. We show that the downstream incremental distribution, as introduced by Ambec and Sprumont (2002), is the only welfare distribution satisfying both constraints. In addition, we show that this result holds true for numerous extensions of our model.
ISSN:2073-4336
2073-4336
DOI:10.3390/g10020023