### Abstract

Original language | English |
---|---|

Number of pages | 30 |

Publication status | Published - Feb 2019 |

Externally published | Yes |

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### Keywords

- River sharing problem
- Water sharing agreements
- Fair allocations

### Cite this

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**An efficient, fair and stable solution to the river sharing problem.** / Öztürk, Emel.

Research output: Working paper › Scientific

TY - UNPB

T1 - An efficient, fair and stable solution to the river sharing problem

AU - Öztürk, Emel

PY - 2019/2

Y1 - 2019/2

N2 - We consider the problem of sharing water among agents located along a river. A vector of property rights specifies how much water each agent is entitled to. The key concept in this study is an allocation's distance-to-reference vector. At an allocation, the distance-to reference vector specifies, for each agent, the amount of money that needs to be subtracted from the bundle the agent receives in order for the agent to be indifferent between the reference vector and the allocation. First, we characterize a social ordering function, called the reference-welfare equivalent Lorenz ordering, which ranks an allocation over another if the distance-to-reference vector of the former is more equal than the distance-to-reference vector of the latter. Second, we show that maximizing the reference-welfare equivalent Lorenz ordering over the set of acceptable allocations (defined in the sense of the core) leads to a class of solutions that meet the three key objectives of international river management: efficiency, fairness, and stability. We show that this class contains new solutions as well as the downstream incremental solution of Ambec and Sprumont (2002). Finally, we present an application of our approach to the case of the Blue Nile River Basin, shared among Ethiopia, Sudan and Egypt.

AB - We consider the problem of sharing water among agents located along a river. A vector of property rights specifies how much water each agent is entitled to. The key concept in this study is an allocation's distance-to-reference vector. At an allocation, the distance-to reference vector specifies, for each agent, the amount of money that needs to be subtracted from the bundle the agent receives in order for the agent to be indifferent between the reference vector and the allocation. First, we characterize a social ordering function, called the reference-welfare equivalent Lorenz ordering, which ranks an allocation over another if the distance-to-reference vector of the former is more equal than the distance-to-reference vector of the latter. Second, we show that maximizing the reference-welfare equivalent Lorenz ordering over the set of acceptable allocations (defined in the sense of the core) leads to a class of solutions that meet the three key objectives of international river management: efficiency, fairness, and stability. We show that this class contains new solutions as well as the downstream incremental solution of Ambec and Sprumont (2002). Finally, we present an application of our approach to the case of the Blue Nile River Basin, shared among Ethiopia, Sudan and Egypt.

KW - River sharing problem

KW - Water sharing agreements

KW - Fair allocations

M3 - Working paper

BT - An efficient, fair and stable solution to the river sharing problem

ER -