Strategic Behavior and Efficiency in the Common Property Extraction of Groundwater

摘要: Groundwater has always been regarded as a common property resource where entry is restricted by land ownership and private exploitation inefficient. In 1980, Gisser Sanchez presented first estimation of this inefficiency, cornparing socially optimal with (competitive) using model linear water demand, average extraction cost independent the rate linearly decreasing respect to table level. They characterized aquifer assuming that farmers are myopic choose their maximize current profits, whereas obtained maximizing present value stream aggregate profits. Their results show if storage capacity relatively large, difference between two systems so small it can be ignored for practical consideration. This result called Gisser— rule Nieswiadomy (1985) important policy implication: regulation does not seem justified since profits brings very high.1