This paper experimentally tests if adding forward trading or tradable entitlements to already commonly used spot trade in water markets improves allocation and production efficiency. We find that forward contracts significantly increase efficiency, while tradable entitlements do not. The advantage of forward contracts increases further after a climate change shock, which reduces the expected total water supply. However, tradable water entitlements are rather more damaging than beneficial. Due to the complexity involved in pricing entitlements they not only fail to increase efficiency, but are often seriously mispriced, which results in concentrated holdings and considerable wealth inequality across market participants.

本文实验性地测试了在水市场上已经广泛使用的现货交易中增加远期交易或可交易的权利是否可以改善分配和生产效率。我们发现远期合同显着提高了效率，而可交易的权利却没有。在气候变化冲击之后，远期合同的优势进一步增加，这减少了预期的总供水量。但是，可交易的水权所带来的损害更大，而不是有益的。由于定价权涉及的复杂性，它们不仅无法提高效率，而且常常会严重定价错误，从而导致持股集中，并且市场参与者之间存在相当大的财富不平等。