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A game-theoretic framework to evaluate the strategic interaction of public and private desalination firms: A case study from Chile

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  • Cáceres González, Rodrigo A.
  • Zúñiga Leyton, Eduardo

Abstract

This article develops a game-theoretic model to analyze the strategic behavior of public and private desalination firms, motivated by the Chilean context. In a duopoly setting, we examine how these firms allocate water between residential and mining sectors, under government influence through subsidies and production requirements. The analysis explores how the share of public production and differences in plant efficiency affect equilibrium outcomes. Results show that the substantial volumetric difference between residential and mining demand is a key driver of equilibrium strategic behavior. The model is calibrated using real data from the Coquimbo region in Chile.

Suggested Citation

  • Cáceres González, Rodrigo A. & Zúñiga Leyton, Eduardo, 2025. "A game-theoretic framework to evaluate the strategic interaction of public and private desalination firms: A case study from Chile," Utilities Policy, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:juipol:v:97:y:2025:i:c:s0957178725001560
    DOI: 10.1016/j.jup.2025.102041
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    References listed on IDEAS

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