Developing an Agent-based Water Market Mechanism for Sustainable Groundwater Management in Agricultural Regions

Soroush Sharghi (), Pooya Ghorbanpoor Sheikhani () and Reza Kerachian ()
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Soroush Sharghi: Shahid Beheshti University, Faculty of Civil, Water and Environmental Engineering
Pooya Ghorbanpoor Sheikhani: University of Tehran, School of Civil Engineering, College of Engineering
Reza Kerachian: University of Tehran, School of Civil Engineering, College of Engineering

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2025, vol. 39, issue 14, No 4, 7435-7455

Abstract: Abstract We introduce an agent-based framework designed for a seasonal groundwater market that captures the behavior of market participants and the redistribution of water rights. Drawing on the theory of planned behavior (TPB), our model predicts users’ participation in the groundwater market as well as their pricing strategies. To validate this framework, we applied it to the Nough Plain in Iran. Our findings show that agricultural water users in the region currently generate an annual profit of 103.23 billion tomans(As of June 11, 2025, 1 toman was worth approximately 0.00001209 US dollars, according to the exchange rate published by the Central Bank of Iran.) by utilizing their adjusted water rights. With the implementation of a groundwater market, this profit rises by 10.2%, reaching 113.83 billion tomans. Furthermore, by simulating user behavior through the proposed agent-based framework, we observe total annual profits ranging from 105.8 to 112.4 billion tomans. These results suggest that actual user behavior deviates from the fully rational assumptions typically made in traditional water market models, leading to lower overall profits. Importantly, by encouraging improved behavior and greater participation among water users, the efficiency and performance of groundwater markets can be significantly enhanced.

Keywords: Seasonal groundwater market; Agent-based models; Theory of planned behavior; Behavioral model; Nough plain (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11269-025-04301-8

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