Cooperation and asymmetries in common-pool resources

Abstract

This paper examines common-pool resource, such as an irrigation system, that is asymmetric in the sense that the headender has a first mover advantage in appropriating water. The headender could fill their fields with water, leaving little for the tailender. However, irrigation system needs maintenance and the headender may leave more water for the tailender to incentivize him to participate in maintenance. We show that first best symmetric cooperation, where the two parties share the water equally and make first best investments in maintenance, is self-enforcing when the headender's appropriation capacity is moderate and maintenance is costly, which are typical conditions in traditional irrigation systems. If symmetric cooperation is not sustainable, the headender's incentives can be improved by allocating him more than equal share of the water.