Market power in California's water market

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Date

2023-10

Journal Title

Journal ISSN

Volume Title

Publisher

Wiley

Abstract

We estimate market power in California's surface water market. Market power may distort the potential welfare gains from water marketing. We use a Nash-Cournot model and derive a closed-form solution for the extent of market power in a water market setting. We then use this solution to estimate market power in a newly assembled dataset on California's water economy. We show that, under the assumptions of the Nash-Cournot model, market power in this thin market is limited.

Description

Keywords

California, market power, Nash-Cournot, water markets

Citation

Tomori, Françeska, Erik Ansink, Harold Houba, Nick Hagerty, and Charles Bos. 2023. “ Market Power in California's Water Market.” American Journal of Agricultural Economics 1–26. https://doi.org/10.1111/ajae.12434
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