Centralized and decentralized management of groundwater with multiple users
In this work, we investigate two groundwater inventory management schemes with multiple users in a dynamic game-theoretic structure: (i) under the centralized management scheme, users are allowed to pump water from a common aquifer with the supervision of a social planner, and (ii) under the decentralized management scheme, each user is allowed to pump water from a common aquifer making usage decisions individually in a non-cooperative fashion. This work is motivated by the work of Saak and Peterson , which considers a model with two identical users sharing a common aquifer over a two-period planning horizon. In our work, the model and results of Saak and Peterson  are generalized in several directions. We first build on and extend their work to the case of n non-identical users distributed over a common aquifer region. Furthermore, we consider two different geometric configurations overlying the aquifer, namely, the strip and the ring configurations. In each configuration, general analytical results of the optimal groundwater usage are obtained and numerical examples are discussed for both centralized and decentralized problems.
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- Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 1-26.
- Saak, Alexander E. & Peterson, Jeffrey M., 2006.
"Groundwater Use under Incomplete Information,"
2006 Annual meeting, July 23-26, Long Beach, CA
21190, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Haouari, Mohamed & Azaiez, Mohamed N., 2001. "Optimal cropping patterns under water deficits," European Journal of Operational Research, Elsevier, vol. 130(1), pages 133-146, April.
- Jeffrey M. Peterson & Ya Ding, 2005. "Economic Adjustments to Groundwater Depletion in the High Plains: Do Water-Saving Irrigation Systems Save Water?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 147-159.
- Azaiez, M. N. & Hariga, M., 2001. "A single-period model for conjunctive use of ground and surface water under severe overdrafts and water deficit," European Journal of Operational Research, Elsevier, vol. 133(3), pages 653-666, September.
- Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 27-41.
- Azaiez, M. N., 2002. "A model for conjunctive use of ground and surface water with opportunity costs," European Journal of Operational Research, Elsevier, vol. 143(3), pages 611-624, December.
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