Economics Research Institute Study Paper
Utah State University Department of Economics
Multiple-cost sharing rules often coexist in seemingly identical environments. We use shared irrigation costs as a context for examining the extent to which the structural environment explains the selection of a cost sharing rule. We find that environmental factors that-induce greater dependence on the cooperation of others, influence majority interests, create difficulties for interpersonal utility comparisons, or impact notions of "faimess"-all have impressive explanatory power. These results present the first formal empirical analysis of the manner in which structural features influence the actual cost-sharing choices of economic agents.
Aadland, David and Kolpin, Van, "Environmental Determinants of Cost Sharing--An Application to Irrigation" (2001). Economic Research Institute Study Papers. Paper 221.