EURO 2024 Copenhagen
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2819. From many sources to many users: water allocation mechanisms under resource dynamics

Invited abstract in session WA-40: Equilibrium detection in applications, stream Interfaces Between Optimization, Hierarchical Problems and Equilibrium Detection with Applications.

Wednesday, 8:30-10:00
Room: 96 (building: 306)

Authors (first author is the speaker)

1. Petros Xepapadeas
Management Science & Technology, Athens University of Economics & Business

Abstract

We study optimal water management of many sources which are partitioned into surface and groundwater, with water transportation through natural processes being possible among water bodies. Water stock dynamics involve natural inflows and outflows from water users’ abstractions as well as natural processes. Sustainability constraints are introduced by applying terminal conditions on the water stocks. The net benefits of the users are quadratic with concave gross benefits and convex costs based on the amount of water used from each water source. We focus on developing two sequential water abstraction solutions based on serial dictatorship under explicit resource dynamic constraints. The first is when each sequential user commits to a path for the whole planning horizon, and the second is when the serial dictatorship water abstraction decisions are completed in each time period. Simultaneous water management is also studied in terms of cooperative solutions and non-cooperative open-loop and feedback Nash equilibrium solutions. The sequential and simultaneous solutions are then compared in terms of aggregate and individual benefits, and in terms of meeting the sustainability constraints. The results of the comparison are used to characterize water management policies.

Keywords

Status: accepted

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