Water Resources Allocation: A Cooperative Game Theoretic Approach

Water allocation is essentially an exercise in allocating available water to various demanding users. Water allocations merely based on a water rights approach usually do not make efficient use of water for the whole river basin. Meanwhile, an economic efficient water allocation plan cannot be well implemented if the involved participants or stakeholders do not regard it as being fair. A cooperative game theoretic approach is proposed to solve water allocation problems in two steps: (1) initial allocation of water rights to water users or stakeholders based on existing water rights systems or agreements, and (2) reallocation of water to achieve efficient use of water through water transfers. An illustrative example is utilized to show the effectiveness and potential advantages of this approach.