The Sequential Equal Surplus Division for Sharing International Rivers with Bifurcations

We consider the problem of sharing water from a river among the group of countries located along it. The benefit of each country depends on the amount of water it consumes. An allocation of the water is efficient when it maximizes the total benefits of the countries. The problem of finding a fair welfare distribution can be modeled as a cooperative game. We introduce a new allocation rule, called the sequential equal surplus division, for sharing the total welfare resulting form the cooperation of countries along a river with bifurcations. This rule obeys the so-called Territorial Integration of all Basin States doctrine, which emphasizes compromise and fairness among countries. We provide two axiomatic characterizations of this rule.