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Sharing a river. (English) Zbl 1033.91503
Summary: A group of agents located along a river have quasi-linear preferences over water and money. We ask how the water should be allocated and what money transfers should be performed. The core lower bounds require that no coalition should get less than the welfare it could achieve by using the water it controls. The aspiration upper bounds demand that no coalition enjoy a welfare higher than what it could achieve in the absence of the remaining agents. Exactly one welfare distribution satisfies the core lower bounds and the aspiration upper bounds: it is the marginal contribution vector corresponding to the ordering of the agents along the river.

MSC:
91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91A12 Cooperative games
91A40 Other game-theoretic models
91B32 Resource and cost allocation (including fair division, apportionment, etc.)
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