Equity–Efficiency Optimizing Resource Allocation: The Role of Time Preferences in a Repeated Irrigation Game

• Autores: Bjorn Van Campenhout, Ben D'Exelle, Els Lecoutere
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 77, Nº. 2, 2015, págs. 234-253
• Idioma: inglés
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• Resumen

  • We study repeated water allocation decisions among small scale irrigation users in Tanzania. In a treatment replicating water scarcity conditions, convexities in production make that substantial efficiency gains can be obtained by deviating from equal sharing, leading to an equity–efficiency trade-off. In a repeated game setting, it becomes possible to reconcile efficiency with equity by rotating the person who receives the largest share, but such a strategy requires a longer run perspective. Correlating experimental data from an irrigation game with individual time preference data, we find that less patient irrigators are less likely to use a rotation strategy.