Application of Game Theory in Water Resource Management

Abstract

Game Theory (GT), both in its non-cooperative (NCGT) and cooperative (CGT) forms, has been pivotal in its contribution to the analysis of important aspects related to water resources. Over time, GT models have developed and have been applied to various aspects of water management, such as decisions on cost and benefit allocation in multi-objective multi-use water projects, conflicts and joint management of irrigation projects, management of groundwater aquifers, hydropower facilities, urban water supplies, wastewater treatment plants, and trans-boundary water disputes. World water resources face new challenges that suggest a renewed role for GT in water management. Scarcity, growing populations, and massive development have led to increased competition over water resources and subsequent elevated pollution levels. Climate change is expected to unevenly affect the hydrological cycle, leading to increased variability in water supplies across time and space and uncertainty in water allocation decisions. Future investments in water resource projects will be astronomical, needing much more stable rules for cost allocations among participating entities and over time. Levels of water disputes may vary from local to regional, state, and international levels. All of these suggest that while GT models and applications to water resources have advanced over the years, much more is expected.