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Game Theory Analysis Of Competition For Groundwater Involving El Paso, Texas And Ciudad Juarez, Mexico

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  • Nakao, Megumi
  • Wichelns, Dennis
  • Montgomery, John T.

Abstract

We examine the potential gains from cooperation in the withdrawal of water from the Hueco Bolson aquifer that provides municipal water supply for El Paso, Texas and Ciudad Juarez, Mexico. The aquifer lies beneath the international border, and both cities operate independently regarding pumping rates and withdrawals. We estimate the gains by comparing four scenarios in a dynamic setting: 1) a status quo scenario in which both cities continue extracting groundwater as they are at present, 2) a Nash non-cooperative game scenario, 3) a Nash bargaining scenario, and 4) a scenario that involves maximizing the sum of net benefits in both cities. All scenarios, including the non-cooperative game, provide a longer useful life of the Hueco Bolson aquifer than does the status quo. In the Nash bargaining scenario, both cities gain from cooperation and the sum of net benefits approaches the maximum that can be obtained by maximizing that value explicitly.

Suggested Citation

  • Nakao, Megumi & Wichelns, Dennis & Montgomery, John T., 2002. "Game Theory Analysis Of Competition For Groundwater Involving El Paso, Texas And Ciudad Juarez, Mexico," 2002 Annual meeting, July 28-31, Long Beach, CA 19732, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea02:19732
    DOI: 10.22004/ag.econ.19732
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    Cited by:

    1. Khadije Norouzi Khatiri & Mohammad Hossein Niksokhan & Amin Sarang & Asghar Kamali, 2020. "Coupled Simulation-Optimization Model for the Management of Groundwater Resources by Considering Uncertainty and Conflict Resolution," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(11), pages 3585-3608, September.
    2. Chi Zhang & Guoli Wang & Yong Peng & Guolei Tang & Guohua Liang, 2012. "A Negotiation-Based Multi-Objective, Multi-Party Decision-Making Model for Inter-Basin Water Transfer Scheme Optimization," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(14), pages 4029-4038, November.
    3. Ghosh, Sanchari & Willett, Keith D., 2016. "Hydro-economic modeling of the benefits and costs of water management in the Santa Cruz border region," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235663, Agricultural and Applied Economics Association.

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    Keywords

    Resource /Energy Economics and Policy;

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