Van Campenhout, Bjorn, D'Exelle, Ben ORCID: https://orcid.org/0000-0001-9332-5223 and Lecoutere, Els (2015) Equity-efficiency optimizing resource allocation: The role of time preferences in a repeated irrigation game. Oxford Bulletin of Economics and Statistics, 77 (2). 234–253. ISSN 0305-9049
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Abstract
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.
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