This function is particularly important for research in the human dimensions of global change because of its broad scale, international scope, and interdisciplinary nature. The allocation of water is a complex system, involving externalities, public goods, and shared production facilities. Such complex systems have employed central authorities to solve coordination problems and dictate solutions to the allocation problems. In a world of rapid technological and environmental change, government solutions may move too slowly to allow a society to adapt efficiently. Smart, computer-assisted markets provide the promise of developing flexible decentralized solutions to complex problems.
Smart markets allow private market allocations to instantaneously account for coordination problems.
This research develops, tests, and implements a generic smart market for water allocation which will be initialized for application in California.