18 Dec 2012

All-in-auctions is published!

I've been working on this idea for 5-6 years, and I think it has great potential for reallocating water while respecting the rights of existing users. It just came out in the Journal of Environmental Management.

Abstract: This paper proposes a novel mechanism for reallocating temporary water flows or permanent water rights. The All-in-Auction (AiA) increases efficiency and social welfare by reallocating water without harming water rights holders. AiAs can be used to allocate variable or diminished flows among traditional or new uses. AiAs are appropriate for use within larger organizations that distribute water among members, e.g., irrigation districts or wholesale water agencies. Members would decide when and how to use AiAs, i.e., when transaction costs are high, environmental constraints are binding, or allocation to outsiders is desired. Experimental sessions show that an AiA reallocates more units with no less efficiency that traditional two-sided auctions.

Those of you with an academic subscription can download it here. Those of you without can download my author's copy [pdf]

Addendum: I have made several different presentations of this idea for people who do not like reading academic papers. You can watch this video demonstrating the AiA, look at the the powerpoint version, listen to my lecture, or read a popular version in Solutions Journal.

You can also use these instructions [pdf] to run a demonstration of the AiA to allocate water in shortage or choose where to flood when there's too much water :)

Addendum 2: "Auctions to address issues in Oklahoma" (4 min YouTube) on OSU's SunUpTV and "All-in-Auctions demonstration" (45 min video; 72 min MP3) at the Natural Resource Ecology and Management Seminar, OSU


MG Chandrakanth said...

I am overwhelmed looking at your site. Tell me how all these are possible. You are an excellent teacher, an excellent economist, institutional economist, excellent researcher, excellent human being, excellent humane being, a music lover, interested in water, a very humble, polite, straight forward, honest, person and a teacher. Your website is fantastic. Where, how do you find time to write / fill / share these experiences. You have not hesitated to tell about your personal life too. May I invite you to my University of Agricultural sciences, bangalore, India, (www.toenre.com). I honestly have no funds to invite you. But if you can come, we will take care. I want to introduce youto my students.
I do not know what to say about you. I am just flabbergasted.

J. David Foster said...

David Zetland, I hope you find a way to take MG Chandrakanth up on his generous offer. I believe that you would both benefit just as I did when I accepted an invitation to visit the Administrative Staff College of India in Hyderabad. Interestingly, Bangalore (now Bangaluru) has 24/7 internet, 24/7 electricity (usually) and 24/7 TV and Telephone but only about 4 hours or water per day. Of course, what is left unsaid is that during the other 20 hours when drinking water is not running through those pipes, all manner of other surface waters and waste do enter and run through those same pipes used for the delivery of drinking water.

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