LEE and Economics Departmentc

Abstract. We experimentally test how a monopoly, a duopoly and a public monopoly allocate two different qualities of water to two different types of consumers: households and farmers. Stock depletion for the public monopoly is fastest but closest to the optimal stock level towards the end of the experimental sessions. The private monopoly and duopoly maintain inefficiently high levels of stock throughout the sessions. The average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly