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Competition versus optimal control in groundwater pumping
Author(s) -
Gisser Micha,
Sánchez David A.
Publication year - 1980
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr016i004p00638
Subject(s) - aquifer , groundwater , competition (biology) , control (management) , groundwater resources , water resource management , welfare , environmental science , optimal allocation , economics , natural resource economics , mathematics , engineering , market economy , mathematical optimization , ecology , geotechnical engineering , management , biology
This article considers one of the most important issues in water resources research, namely, the management of groundwater. Economists have long taken it for granted that the temporal allocation of groundwater would lead to welfare losses if left to the free market because all farmers pump from a common aquifer. Hence water economists studied extensively optimal control of temporal groundwater allocation. They never paused to compare the temporal allocation yielded by optimal control with the free market. In this article we prove by comparing the two strategies analytically that if the storage capacity of the aquifer is relatively large, the difference between them is so small that it can be ignored for practical consideration.