Extensive-Form Game for Examining Mutual Trust between a Reservoir Operator and Agricultural Water Users

Abstract

This paper aims to illustrate the hidden bargain decision-making process undertaken by a reservoir operator and basin farmers along with water allocation of the Al-Tharthar reservoir located on the Tigris river. The amount of water discharged from the reservoir is unilaterally determined according to traditional rule curve–based policy. The water discharged from agricultural zones to the stream was observed to be significantly less than the amount estimated based on the reservoir operational policy, particularly in the dry season. The reservoir operator announces the operational policy that will be applied for the coming year to the basin farmers. Both stakeholders are assumed to have incentives to cheat each other. Given their past experience, the farmers may not adhere to their announced allocation, and for the same reason, the reservoir operator may provide false information about water availability in anticipation of the farmers’ response. Noncooperative game theory was applied in an extensive form to model the behind-the-scenes bargaining process between the reservoir operator and basin farmers. The result provided a perspective that can be used to examine the validity of traditional reservoir operational policy on basin management as well as stakeholders’ payoffs under the interactive decision-making situation. The conclusion is that the traditional operational policy implemented for basin management at the Al-Tharthar reservoir was well designed, although the situation of mutual trust between the reservoir operator and farmers emerges in only one-sixth of the cases.