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Stable Agreements with Fixed Payments on Transboundary Flood Prone Rivers

Abraham, A and Ramachandran, P (2021) Stable Agreements with Fixed Payments on Transboundary Flood Prone Rivers. In: 21st International Conference on Group Decision and Negotiation, 6-10 Jun 2021, pp. 99-112.

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Official URL: https://doi.org/10.1007/978-3-030-77208-6_8


This study contributes to the existing literature on the river sharing problem. We extend the traditional river sharing model to incorporate variability in endowments and the externality of flooding. In this work, we construct a theoretical model of a successive flood prone river shared between two riparian states. We investigate the stability of agreements which allocate water as well as flood damages among riparian states. Cooperation is ensured by means of fixed annual side-payments, and responsibilities over flood damages are assumed to be assigned using the Sequential Upstream Proportional Allocation rule. If variability in water availability is taken into account, then a stable agreement must sustain cooperative behaviour for any realization of endowments, and must be resilient to scarcity or floods which occur as a consequence of variability. In order to frame such agreements, we utilise the theory of infinitely repeated discounted games. We derive a threshold limit on the discount factor, below which stability cannot be ensured. © 2021, Springer Nature Switzerland AG.

Item Type: Conference Paper
Publication: Lecture Notes in Business Information Processing
Publisher: Springer Science and Business Media Deutschland GmbH
Additional Information: The copyright for this article belongs to Springer Science and Business Media Deutschland GmbH
Keywords: Behavioral research; Flood damage, A-stable; Discount factors; Proportional allocation; Side-payments; Theoretical modeling; Threshold limits; Transboundary floods; Water availability, Rivers
Department/Centre: Division of Interdisciplinary Sciences > Management Studies
Date Deposited: 28 Nov 2021 09:59
Last Modified: 28 Nov 2021 09:59
URI: http://eprints.iisc.ac.in/id/eprint/70015

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