Page 32 - research-at-iimv-june-01-2022-v3
P. 32

Patel, S.S., & Ramachandran, P. (2021). A

                   bargaining model for sharing water in a river

                   with negative externality. OPSEARCH, 1-22.










            This article is focused on the problem of river sharing in the presence of pollution as a negative externality
            between two riparian states (agents). In this paper, a market-based contract mechanism is presented; it can
            address  the  issue  of  negative externality  imposed  by  an upstream  agent  on  the downstream  agents  while
            sharing a river. The proposed mechanism incorporates a penalty for pollution and also incentives for trading
            water between upstream and downstream agent. The mechanism introduces a new concept of negative water
            as penalty against pollution for an upstream agent in a contract for water sharing. The contract is analysed by a
            market-based  bargaining  model  to  determine  a  negotiated  treaty  between  the  upstream  agent  and  the
            downstream agent. The results show the characterization of agents with regard to agreement points for
            negotiated treaty. Also, it shows that an equilibrium exists for a unique solution that makes both the agents better
            off. The model discussed in this paper can be easily applied to any transboundary river conflict where pollution
            plays an important role.































      PAGE 26
   27   28   29   30   31   32   33   34   35   36   37