Market power in water markets

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We model water markets with market power as multi-market Cournot competition with a river structure. Suppliers are connected through the water balances, which imposes resource constraints, and are connected to heterogeneous water users via a water delivery infrastructure. Our model captures a wide range of specific water market structures. We establish conditions for existence of an equilibrium with market power. Each supplier only serves users with maximal marginal revenues. The monopoly case is similar to the standard one, but three other specific water market structures illustrate that standard intuition has to be revisited. Multiple equilibria may arise for common resources. Terms of use: Documents in

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