Farmers engaging in irrigated agriculture are subject to externalities stemming from their neighbours’ operational decisions on water use. Because of the nature of water flow, these externalities are more evident between neighbours in an upstream–downstream relationship rather than in...

Agricultural water trade has been adopted in many countries as a measure to overcome water deficiency facing irrigated regions. When correctly applied, the system can allocate more water to more productive farmers, thereby improving efficiency in resource utilisation. Despite this enormous...