AN INTEGRATED GAME-THEORY BASED MODEL FOR TRANS-BOUNDARY WATER RESOURCES MANAGEMENT IN NORTH CHINA: A CASE STUDY IN THE GUANTING RESERVOIR BASIN (GRB), BEIJING

Abstract

Water is a fundamental resource in our daily lives and for social development. Currently, water resources are under stressed conditions in north China due to the ongoing growth of demand for water and the frequent occurrences of natural disasters in this area. This problem is further intensified by the deterioration of water quality, which is a side effect of economic development, industrial expansion, and agricultural growth. These problems interconnect with each other, leading to a variety of conflicts over water resources. To resolve such conflicts, a two-person game-theory based model is developed for water resource management in the trans-boundary regions of a river basin. The model is tested on a river basin within this area of China in which water resources are contested. Through the developed model, potential policy alternatives can be generated for water resource management and pollution control within the context of a river basin. Cooperative and/or competitive mechanisms can thus be formulated through competition and cooperation over issues of water quantity and quality among different levels of jurisdictions in the same river basin. Then, Nash Solution is used to solve scenarios of competition and cooperation between the upstream and downstream based on the integration of optimization and simulation models. The developed model and the solution process is then applied to resolve water conflicts between Beijing and Hebei province, which are in the upstream and downstream of the Guanting Reservoir Basin (GRB), respectively, representing two major stakeholders in the contest over water quantity and quality. Non-cooperative and cooperative scenarios for the two-player game scenarios are developed to investigate and compare potential economic benefits of these scenarios. Results indicate that the developed model can be effectively and flexibly employed to resolve water conflicts between upstream and downstream stakeholders in the same river basin. The results can also be used to help formulate economic compensation mechanisms within these jurisdictions.