Environmental and Resource Economics

, Volume 62, Issue 1, pp 19–34 | Cite as

Rainwater Harvesting and Groundwater Conservation: When Endogenous Heterogeneity Matters

  • Raphaël Soubeyran
  • Mabel Tidball
  • Agnes Tomini
  • Katrin Erdlenbruch
Article

Abstract

In this paper, we focus on resource conservation in a model of decentralized management of groundwater and rainwater. We show that a conservation policy may have opposite effects on the level of the resource, depending on the outcome of the decentralized management. More precisely, we consider identical farmers who can use two water resources (groundwater and/or rainwater) and we study the symmetric and asymmetric feedback stationary Nash equilibria of the dynamic game. We show that a subsidy on the use of rainwater may increase the level of the aquifer at the symmetric equilibrium, whereas it decreases the level of the aquifer at the asymmetric equilibrium. This suggests that the usual focus on (interior) symmetric equilibria in dynamic games may provide misleading policy implications.

Keywords

Differential game Asymmetric equilibrium Groundwater  Rainwater Taxation 

JEL Classification

Q15 Q25 C72 

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Raphaël Soubeyran
    • 1
  • Mabel Tidball
    • 1
  • Agnes Tomini
    • 2
  • Katrin Erdlenbruch
    • 3
  1. 1.UMR1135 LAMETAINRAMontpellierFrance
  2. 2.CNRS, EHESS, Aix-marseille School of EconomicsAix-Marseille UniversityMarseilleFrance
  3. 3.UMR G-EAUIrsteaMontpellier cedex 5France

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