Equity Considerations in Fiering's Prototype Water System

Ostrom, T.R. (1974). Equity Considerations in Fiering's Prototype Water System. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-74-067

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Abstract

Fiering (1974) presented a didactic model of a water system to illustrate upstream and downstream trade-offs in power generation versus flood control. Wood (1974) later extended the model to a two-season analysis, related the model to actual problems on the Tisza River basin in Hungary and raised such questions on bargaining as: Where does bargaining start? How do sidepayments extend the range of choice? Are utilities for certain sidepayments equal to utilities for expected benefits?

With growing concern for equitable development and the redistribution of wealth (particularly across international borders) the question is how can cooperative development occur with "equity" joining the list of multiple objectives? Besides addressing the bargaining issues raised by Wood, this paper will briefly outline the problem of equity related to: criteria for wealth distribution; cooperative and non-cooperative games; value of information and risk sharing; negotiation strategy and budgetary constraints; opportunity costs and staged versus single development; equalization schemes and the "incremax technique"; and game theory with a "weak" apponent.

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