Application of non-cooperative dynamic game theory for groundwater conflict resolution

Abstract The opposing objectives of the groundwater stakeholders, ranging from maximum withdrawal for economic gain to minimum withdrawal for aquifer and environmental protection, lead stakeholders to behave non-cooperatively. In this study, dynamic non-cooperative games are applied to model these conflicts. These games incorporate stakeholders' non-cooperative decision-making processes and groundwater exploitation details over time. The two key players considered in this study are the government, which aims to minimize the groundwater drawdown, and local farmers, who pursue maximum economic gain. In order to calculate the players' payoffs over the modeling period, a simulation-optimization model is developed. For evaluation, the proposed methodology is implemented in the Bad-Khaledabad study area in Iran. Therefore, two dynamic non-cooperative games are developed, considering weak governmental power and players' interaction. It is concluded that creating a transactional relationship, involving the cropping patterns changes and the irrigation efficiency enhancement, will increase farmers’ profits by 28% and decrease withdrawal from the aquifer by 21%.