Water Supply and Water Demand of Beijing — A Game Theoretic Approach for Modeling

Water allocation is an important and complicated issue in natural resource management. It usually involves water demand and water supply conflicts. However, most of the existing water allocation approaches usually do not function well in solving those conflicts. On the one hand, market-based water allocation is efficient for different users. On the other hand, however, water market is difficult to establish in most countries. One common feature of water allocation is that it is involved in such conflicts with multi-users of contradictory interests, goals and strategies. In this paper, a game-theory based concept for modeling of water allocation problems is presented. The demand-supply principle (DSP) is used as a platform to formulate non-cooperative games for decision support of water management plans. The results of such games allow not only better comparisons of the different groups of water users (including environment), but also give benefits to the administration and water supply companies. Examples are given from Beijing municipality.