An Empirical Study for Real Options of Water Management in the Three Gorges Reservoir Area

Zuliang Lu, Xiankui Wu, Fei Cai and Fei Huang
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Zuliang Lu: Laboratory for Nonlinear Science and System Structure, Chongqing Three Gorges University, Chongqing 404000, China
Xiankui Wu: Laboratory for Nonlinear Science and System Structure, Chongqing Three Gorges University, Chongqing 404000, China
Fei Cai: Laboratory for Nonlinear Science and System Structure, Chongqing Three Gorges University, Chongqing 404000, China
Fei Huang: Laboratory for Nonlinear Science and System Structure, Chongqing Three Gorges University, Chongqing 404000, China

Sustainability, 2021, vol. 13, issue 20, 1-16

Abstract: This paper investigates an empirical evaluation of water management on agricultural irrigation. To address this problem, a real options model was proposed. This model analysis the choice of investment in water savings. Also, the model discusses a linear complementary problem that can be transformed into the inequalities of parabolic variational. By using a power penalty method, we solved the parabolic variational inequalities. The results depicted that the nonlinear parabolic equations’ solution is converges to the rate of order O ( h − k 2 ) . A numerical example is given at the end of the paper to demonstrate the theoretical analysis follows from the Three Gorges Reservoir Area.

Keywords: water management; Three Gorges Reservoir Area; water price (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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