Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229717 
Year of Publication: 
2021
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2021-011/VIII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We estimate market power in California's thin water market. Market frictions 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 typical 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 Cournot model, market power in this thin market is limited.
Subjects: 
Water markets
Market power
California
Cournot-Nash
JEL: 
C72
D43
Q25
Document Type: 
Working Paper

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