Cost Allocation of Multiagency Water Resource Projects: Game Theoretic Approaches and Case Study

Lejano, Raul P.; Davos, Climis A.

doi:10.1029/95wr00322

Cited by 51 publications

(37 citation statements)

References 10 publications

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“…The nucleolus allocation is a single solution that is always in the core, if the core is nonempty. Example applications of the nucleolus solution in water resources management include those of Suzuki and Nakayama [1976], Kilgour et al [1988], Lejano and Davos [1995], Loehman [1995], and Dinar and Howitt [1997].…”

Section: Nucleolus Institutionmentioning

confidence: 99%

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Cooperative institutions for sustainable common pool resource management: Application to groundwater

Madani

Dinar

2012

Water Resources Research

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Beneficiaries of common pool resources (CPRs) may select available noncooperative and regulatory exogenous institutions for managing the resource, as well as cooperative management institutions. All these institutions may increase the long‐term gains, prolong the life of the resource, and help to escape the tragedy of the commons trap. Cooperative game theory approaches can serve as the backbone of cooperative CPR management institutions. This paper formulates and applies several commonly used cooperative game theoretic solution concepts, namely, the core, Nash‐Harsanyi, Shapley, and nucleolus. Through a numerical groundwater example, we show how CPR users can share the gains obtained from cooperation in a fair and efficient manner based on these cooperative solution concepts (management institutions). Although, based on their fairness rationales, various cooperative management institutions may suggest different allocations that are potentially acceptable to the users, these allocation solutions may not be stable as some users may find them unfair. This paper discusses how different methods, such as application of the plurality rule and power index, stability index, and propensity to disrupt concepts, can help identify the most stable and likely solutions for enforcing cooperation among the CPR beneficiaries. Furthermore, how the noncooperative managerial characteristics of the CPR users can affect the stability and acceptability of the different cooperative CPR management institutions is discussed, providing valuable policy insights for cooperative CPR management at community levels.

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Section: Nucleolus Institutionmentioning

confidence: 99%

“…The Shapley solution is a unique solution that is in the core of convex games. Example applications of the Shapley concept in the water resources literature include those of Young et al [1982], Dinar et al [1992], Lejano and Davos [1995], Loehman [1995], and Dinar and Howitt [1997].…”

Section: Shapley Institutionmentioning

confidence: 99%

Cooperative institutions for sustainable common pool resource management: Application to groundwater

Madani

Dinar

2012

Water Resources Research

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“…In applying Normalized Nucleolus (Lejano and Davos 1995) the excess is replaced by the ratio of the excess and the total payoff of the coalition: e n ¼ ν S ð Þ−∑ S x i ∑ S x i . Then the Normalized Nucleolus is found by replacing problem (31)-(33) by the following:…”

Section: The Normalized Nucleolusmentioning

confidence: 99%

Nonlinear Interval Parameter Programming Combined with Cooperative Games: a Tool for Addressing Uncertainty in Water Allocation Using Water Diplomacy Framework

Zarghami

Safari

Szidarovszky

et al. 2015

Water Resour Manage

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This paper shows the utility of a new interval cooperative game theory as an effective water diplomacy tool to resolve competing and conflicting needs of water users from different sectors including agriculture, domestic, industry and environment. Interval parameter programming is applied in combination with cooperative game theoretic concepts such as Shapley values and the Nucleolus to provide mutually beneficial solutions for water allocation problems under uncertainty. The allocation problem consists of two steps: water resources are initially allocated to water users based on the Nash bargaining model and the achieved nonlinear interval parameter model is solved by transforming it into a problem with a deterministic weighted objective function. Water amounts and net benefits are reallocated to achieve efficient water usage through net benefit transfers. The net benefit reallocation is done by the application of different cooperative game theoretical methods. Then, the optimization problem is solved by linear interval programming and by converting it into a problem with two deterministic objective functions. The suggested model is then applied to the Zarrinehrud subbasin, within Urmia Lake basin in Northwestern Iran. Findings suggest that a reframing of the problem using cooperative strategies within the context of water diplomacy frameworkcreating flexibility in water allocation using mutual gains approach -provides better outcomes for all competing users of water.

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“…Thus, the methods of equally cost allocation have been developed such as Minimum Core, Shapley value, Nash Bargaining Solution, etc. [10]. Later on many studies have focused on the application of game theory in solving water conflicts, such as pollution of transboundary rivers [5] and water allocation problems [5,11,12].…”

Section: Introductionmentioning

confidence: 99%

Simulating water conflicts using game theoretical models for water resources management

Wei¹,

Gnauck²

2007

WIT Transactions on Ecology and the Environment, Vol 106

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Water quality degradation and water scarcity are two serious problems in developing countries. Water management related to these problems usually involves multi-stakeholders with contradictory interests. In the absence of market and exclusive property rights, conflicts among those multi-stakeholders are unavoidable. Game theory can be an appropriate approach to simulate and resolve such conflicts. In this paper, the conflicts of multiple water stakeholders involved in water management of the Hanjiang River Basin in China are modelled as non-cooperative and cooperative games. Statistical and econometric regression models are used to formulate the payoff functions of different players. Cost-benefit analysis (CBA) and the demand-supply principle (DSP) are applied to compare the game outcomes. The results of the game simulations show that cooperation can make all the players better off, although some players may be worse off before the benefit is shared among the players by side payment. The results are not only a comparison of the different water stakeholders, but also benefit water administration for decision support.

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Cost Allocation of Multiagency Water Resource Projects: Game Theoretic Approaches and Case Study

Cited by 51 publications

References 10 publications

Cooperative institutions for sustainable common pool resource management: Application to groundwater

Cooperative institutions for sustainable common pool resource management: Application to groundwater

Nonlinear Interval Parameter Programming Combined with Cooperative Games: a Tool for Addressing Uncertainty in Water Allocation Using Water Diplomacy Framework

Simulating water conflicts using game theoretical models for water resources management

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