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Bargaining Model of Synergistic Revenue Allocation for the Joint Operations of a Multi-Stakeholder Cascade Reservoir System

Author

Listed:
  • Bin Xu

    (Nanjing Hydraulic Research Institute
    Hohai University)

  • Yufei Ma

    (Hohai University)

  • Ping-an Zhong

    (Hohai University)

  • Zhongbo Yu

    (Nanjing Hydraulic Research Institute
    Hohai University)

  • Jianyun Zhang

    (Nanjing Hydraulic Research Institute)

  • Feilin Zhu

    (Hohai University)

Abstract

Given the institutional limitations of multi-stakeholders, exploring the synergistic revenue from the joint reservoir operations of a multi-stakeholder multi-reservoir system requires a synergistic revenue allocation mechanism to ensure a beneficial solution for multi stakeholders. This study established a synergistic revenue allocation model using bargaining game theory under the principles of equity, rationality, and efficiency. For the maximization the Nash product of gains in the utility of stakeholders and constraints on the feasibility of allocation plans considering all the possible formations of sub-coalitions, the analytic optimal solution of the bargaining model was derived using the first-order optimality condition. The optimal revenue allocation plan meets the conditions of the equal quasi-marginal utility function among stakeholders. The methodologies were applied to a hypothetical cascade reservoir system operated by multiple stakeholders. Compared with the revenue allocation plans obtained by a proportional rule method and the Shapley value method, the results corroborate that (1) the allocation plan of the bargaining model is jointly determined by the interval of the revenue range of each reservoir and the effectiveness of the sub-coalition constraints, indicating that the allocated synergistic revenue is positively correlated with the singleton contribution and team contribution on the total revenue of the grand coalition; (2) the difference in the plans obtained by the three methods is generally determined by the difference in equity definition; and (3) the synergistic revenue allocation plan obtained from the bargaining model is the highest homogenized among all reservoirs (stakeholders), which demonstrates that the revenue of those dominated stakeholders can be improved compared with other plans. The proposed methodologies provide new insights to guide benefit share decisions in multi-stakeholder reservoirs system.

Suggested Citation

  • Bin Xu & Yufei Ma & Ping-an Zhong & Zhongbo Yu & Jianyun Zhang & Feilin Zhu, 2018. "Bargaining Model of Synergistic Revenue Allocation for the Joint Operations of a Multi-Stakeholder Cascade Reservoir System," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(14), pages 4625-4642, November.
    • Handle: RePEc:spr:waterr:v:32:y:2018:i:14:d:10.1007_s11269-018-2075-5
    DOI: 10.1007/s11269-018-2075-5
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    2. Yun Chen & Zhigen Hu & Quan Liu & Shu Chen, 2020. "Evolutionary Game Analysis of Tripartite Cooperation Strategy under Mixed Development Environment of Cascade Hydropower Stations," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(6), pages 1951-1970, April.
    3. Lingquan Dai & Huichao Dai & Haibo Liu & Yu Wang & Jiali Guo & Zhuosen Cai & Chenxi Mi, 2020. "Development of an Optimal Model for the Xiluodu-Xiangjiaba Cascade Reservoir System Considering the Downstream Environmental Flow," Sustainability, MDPI, vol. 12(3), pages 1-18, January.
    4. Liqin Zhang & Jun XIE & Xingying CHEN & Yongsheng Zhan & Lv Zhou, 2020. "Cooperative Game-Based Synergistic Gains Allocation Methods for Wind-Solar-Hydro Hybrid Generation System with Cascade Hydropower," Energies, MDPI, vol. 13(15), pages 1-14, July.

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