Sharing a River with Downstream Externalities

Steinmann, Sarina; Winkler, Ralph (July 2015). Sharing a River with Downstream Externalities (Discussion Papers 15-08). Bern: Department of Economics

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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.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Steinmann, Sarina and Winkler, Ralph

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

26 Feb 2021 14:52

Last Modified:

26 Feb 2021 14:52

JEL Classification:

C71, D62, Q53

BORIS DOI:

10.48350/145817

URI:

https://boris.unibe.ch/id/eprint/145817

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