Monopoly Power and Distribution in Fragmented Markets : The Case of Groundwater

  title={Monopoly Power and Distribution in Fragmented Markets : The Case of Groundwater},
  author={Hanan G. Jacoby and Rinku Murgai and Saeed Ur Rehman},
This paper uses data from Pakistan's Punjab to examine monopoly power in the market for groundwater--irrigation water extracted using private tubewells--a market characterized by barriers to entry and spatial fragmentation. Our analysis of individual groundwater transactions over an 18 month period shows that tubewell owners price discriminate in favor of their own share-tenants, as a simple optimal contracting model would predict. Consequently, tubewell owners and their tenants use… CONTINUE READING
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