Optimal Allocation of Zayanderood River AmongChaharmahal&Bakhtiary, Yazd and Isfahan Provinces

Gholam Hossain Kiani (), Rahman Khosh Akhlagh () and Mohammad Mahdi Kamal ()
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Gholam Hossain Kiani: Assistant Professor of Economics, University of Isfahan
Rahman Khosh Akhlagh: Professor of Economics, University of Isfahan
Mohammad Mahdi Kamal: Ph.D. Candidate in Economics, University of Isfahan

Quarterly Journal of Applied Theories of Economics, 2019, vol. 6, issue 3, 165-188

Abstract: Water of Zayandehrood River is used as rival in the agriculture, industry and domestic sectors of Chaharmahal & Bakhtiari, Isfahan and Yazd provinces. In this study we answer to this question: How water resources must be optimally allocated among these sectors? In this regards game theory, a nonlinear programming model and demand functions in 2013 were used to maximize the consumers’ surplus in domestic sector of all provinces, agricultural sector of Isfahan and Chaharmaha l& Bakhtiari and the industry sector of Isfahan province. The different forms of cooperation as triple and dual form of coalitions were investigated and the existence of core was checked. The results showed that in the cooperative scenario among the different sectors of the three provinces, the consumer surplus will increase 2.95% compare to the non-cooperation scenario. In the cooperative scenario the consumer surplus will be increased respectively 6.1% and 0.09% in the Isfahan and Yazd provinces, whereas decreased 24.49% in Chaharmahal & Bakhtiary province. However, this consumer surplus reduction can be compensated from increased surplus in two other provinces. If the allocation forms in the Shapley structure in triple coalition among the players, the allocation will be located in the core and the automatic mechanism will be created that finally forms the Triple coalition.

Keywords: Game Theory; Efficient allocation; Shaply value; Surplus; Zayanderood (search for similar items in EconPapers)
JEL-codes: Q25 Q34 Q54 (search for similar items in EconPapers)
Date: 2019
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