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Negotiating on water: insights from non-cooperative bargaining theory

Published online by Cambridge University Press:  14 March 2007

CARLO CARRARO ,
CARMEN MARCHIORI  and
ALESSANDRA SGOBBI
CARLO CARRARO
Affiliation:
Department of Economics, University of Venice, San Giobbe 873, 30121, Venice, Italy
CARMEN MARCHIORI
Affiliation:
Department of Geography and Environment, London School of Economics, Houghton Street, WC2A 2AE, London, UK
ALESSANDRA SGOBBI
Affiliation:
School for Advanced Studies in Venice, University of Venice, Venice International University, Island of San Servolo, 30100, Venice, Italy
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Abstract

The purpose of this paper is to review the applications of non-cooperative bargaining theory to water management problems. The interest in this subject stems from two considerations: (i) water resources continue to be mismanaged, despite their recognized importance for sustainable development, in particular in developing countries; (ii) negotiated decision making has the potential to improve water management, yet there is still little formal understanding of the forces driving bargaining processes, and applications of formal negotiation theory to water issues are also lacking. This paper surveys the existing non-cooperative bargaining models applied to water management problems, with the purpose of preliminarily assessing whether such a formal approach in the phase of problem exploration and policy formulation can support decision makers in the real world. It is the contention of this paper that the proposed approach may offer direct and indirect support by: shortening the time needed to reach an agreement through the (theoretical) identification of an ‘acceptability space’, and helping select policies which are self-enforcing and, therefore, acceptable.

Type
Research Article
Information
Environment and Development Economics , Volume 12 , Issue 2 , April 2007 , pp. 329 - 349
Copyright
© 2007 Cambridge University Press

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Footnotes

The authors are grateful to Ariel Dinar, Zmarak Shalizi, Anastasios Xepapadeas, and two anonymous referees for helpful comments on previous versions of this paper and to the World Bank for financial support. The usual disclaimer applies.