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This paper examines cost-sharing arrangements on a sample of twenty-five irrigation ditches located in a south-central Montana community. These arrangements, variations of serial and average cost sharing, often date back to the corresponding ditch’s construction at the turn of the


century. We provide axiomatic characterizations of these mechanisms using a list of static and dynamic equity principles that have been embraced by the ranchers actually involved, as revealed by direct phone surveys. We also show that the observed cost-sharing arrangements can be


characterized as unique solutions to equity-constrained welfare maximization. Our characteriza-tions provide both theoretical support for the observed longevity of these arrangements and new insight into similarities and differences between serial and (restricted) average cost sharing in a context of irrigation. 1998 Elsevier Science B.V.

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