  This article is addressing the problem of river sharing between two agents
along a river in the presence of negative externalities. Where, each agent
claims river water based on the hydrological characteristics of the
territories. The claims can be characterized by some international framework
(principles) of entitlement. These international principles are appears to be
inequitable by the other agents in the presence of negative externalities. The
negotiated treaties address sharing water along with the issue of negative
externalities imposed by the upstream agent on the downstream agents. The
market based bargaining mechanism is used for modeling and for characterization
of agreement points.
