Water Markets in Europe

Global Challenges (FGGA

An Auction Market for Journal Articles

Economic articles are published very slowly. We believe this results from the poor incentives referees face. We recommend that an auction market replace the current, push system for submitting papers and demonstrate that our proposed market has a stable, Pareto-improving equilibrium. Besides the benefits of speed, this pull mechanism increases the quality of articles and journals and rewards referees for their effort. Although the auction price gives a prior on a paper's future value, its actual value|as a published article|depends on later citations. Since the auction price of later papers goes to the editors, authors and referees of earlier, cited articles, "auction earnings" give a direct measure of the value of articles, journals (the sum of articles) and academics - as authors, editors and reviewers - rewarding good writing, decisions and effort, respectively.Academic Journals;Academic Productivity;Market Design.

An Auction Market for Journal Articles

Economic articles are published very slowly. We believe this results mainly from the poor incentives referees face. We recommend that an auction market replace the current system for submitting papers and demonstrate a strict Pareto-improvement of equilibrium. Besides the benefits of speed, this mechanism increases the average quality of articles and journals and rewards editors and referees for their effort. In addition, the "academic dollars" for papers sold at auction go to the authors, editors and referees of cited articles. This income indicates academic productivity (facilitating decisions on tenure and promotion); its recirculation to journals further stimulates quality competition.Academic Journals;Academic Productivity;Market Design. JEL codes

Focal Points, Gender Norms and Reciprocation in Public Good Games

We examine the impact of information regarding other people’s choices on individual choice in a public good experiment with two separate treatments. In the implicit treatment, subjects do not see the average contribution of others in their group, but they can calculate it from the information available. In the explicit treatment, subjects see the average contribution of others in their group. If subjects are rational calculating agents as suggested in mainstream economic theory there should be no difference in observed behavior across treatments: agents should use all available information to make decisions. What we see instead is quite different and consistent with the presence of social norms: first, players change their behavior in response to the change in displayed information; second, changes in individual behavior produce identical group outcomes, in terms of total payoffs or efficiency across the two treatments. How does this happen? The display of the average contribution of others results in behavior consistent with a focal point (Schelling, 1960), i.e., more subjects behave as reciprocators (conditioning their contributions on the contributions of others), and fewer behave as cooperators or free-riders (unconditionally contributing a lot or a little, respectively). This change in behavior differs by gender: women behave similarly to men when they see the average contribution by others; when they cannot, they behave differently, favoring unconditional strategies of free-riding or cooperation. Men’s behavior, in contrast to women’s adaption, does not adjust to social cues, as suggested by Croson and Gneezy (2009).public goods, focal points, social norms, gender, experiments

Is Inverse Demand Perverse?

Our non-representative sample of 245 undergraduates had significantly lower scores on questions presented in the standard heterogeneous form (i.e., Direct Demand equation and Inverse Demand graph) than on questions presented in non-standard homogenous forms. This result, which holds for advanced students, highlights one reason why 95 percent of students in economics principles classes do not enter the major---economics can be gratuitously mathematical. We argue that the Inverse Demand standard hurts rather than helps economics when it is used in early courses, but that professors have no incentive to change their methods. We recommend that early classes use either no graphs or a homogenous combination of graph and equation. The standard should be introduced later, when benefits outweigh costs.Demand and Price Analysis,

Water Agencies\u27 Distribution and Inefficiency Under Different Decision Rules

Water management organizations often distribute water among members according to a political decision function (e.g., voting, historical delivery, etc.) -- not economic functions of willingness to pay or shadow values. As a result, scarce water supplies are lost to some members and found by others, leading to, respectively, over-conservation or over-use of water by the members. We find analytical equilibria with a two-player, game-theoretic model of optimal water distribution under economic (base case) and different political allocation rules (historic allocation, land-values, population, agricultural intensity) to measure the theoretical distortion of each allocation compared to the base case. We then simulate model with n-players to examine the effects of heterogeneous types and interactive influences with different parameter values. We compare these results to the actual allocation of water between the 26 members of the Metropolitan Water District of Southern California to estimate the distribution of costs and benefits to MWD members under MWD\u27s political allocation mechanism

The real estate market index

The Real Estate Market Index (REMI) combines sales price, sales volume and days on market into a summary measure of market activity or liquidity. The REMI, which rises with price or volume and falls with days on market, is more sensitive to market sentiment than indices based on price alone, e.g., the Case-Schiller Index. The REMI is useful to people who want a measure of market liquidity. Data from over 19,000 sales that occurred between January 2000 and November 2009 in Mission Viejo, California illustrate the calculation, calibration and application of the REMI.Global Challenges (FGGA

Teaching water economics by building problem-based case studies

Academic economists have many insights to contribute to water management at all scales. These contributions need to be placed in local institutional contexts and reconciled with insights from other disciplines if they are to affect policy, action, and evaluation. Case studies offer a useful way to organize different lines of thinking in the classroom or the field. This article reviews these factors—academic vs. practical perspectives; economic vs. other disciplines—and provides a framework for teaching water economics by building problem-based case studies.Global Challenges (FGGA

The little book of the commons

The Commons are as widely misunderstood and overlooked as they are widespread and critical in sustaining and enriching our lives. They come from nature, but humans can also create them. They are open for all to enjoy but often suffer from abuse and neglect. This book explains how we've come to understand the formation, function and failure of the commons and uses examples to show how the commons touch our lives in so many ways.Global Challenges (FGGA

Living with water scarcity: scarcity is a perception. Shortage is a fact

Do you worry that there is not enough water for people, the economy and environment? Do you wonder if the water in our taps and rivers is safe or polluted? Do you want to know if farmers waste water, utilities charge too much, or bottled water destroys ecosystems? You're not alone in asking questions. The headlines say "drought, pollution, conflict and insecurity," but the stories don't offer any solutions. Living with Water Scarcity clarifies the connections among personal and social water flows in an accessible style. It describes the origins and costs of water scarcity and explains how to address it with fair and pragmatic policies. You and your community can live with water scarcity -- just manage water as the precious resource it is.Global Challenges (FGGA