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

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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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Original languageEnglish
Pages (from-to)234–253
Number of pages20
JournalOxford Bulletin of Economics and Statistics
Volume77
Issue number2
Early online date12 Feb 2014
DOIs
Publication statusPublished - 2015
Peer-reviewedYes

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© 2014 The Authors. Oxford Bulletin of Economics and Statistics published by Oxford University and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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