A case study on a quasi-market mechanism for water resources allocation using laboratory experiments: the South-to-North Water Transfer Project, China

Abstract

The chosen water management mechanism will directly or indirectly determine the success or failure of the South-to-North Water Transfer Project. Due to the importance and complexity of the project and based on national conditions and the water situation, it is necessary to adopt a quasi-market mechanism. Using the advanced experience in China and abroad for reference, this study takes the central route of the project as an example and conducts experiments by undergraduates in the laboratory. Under the simplified experimental environment, three basic rules of a quasi-market mechanism are contained and integrated: the combination of governmental macro-control with a market mechanism; the combination of water-supply management with water-demand management; and the combination of routine management with emergency management. By observing the decision-making behaviour of the experimental participants, researchers constantly changed experimental conditions to simulate the real water market realistically; finally, researchers drew conclusions based on the repeated experiments.