Game Theoretical Approach to Regulate the Public-Owned River Water Utilities: A case study of Cauvery River

Zareena Begum Irfan () and Jeeva Mary Jacob ()
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Zareena Begum Irfan: Madras School of Economics
Jeeva Mary Jacob: Madras School of Economics

Working Papers from Madras School of Economics,Chennai,India

Abstract: Management of regulated water systems has become increasingly complex due to rapid socio-economic growth and environmental changes in river basins over recent decades. This paper focusses on the public-owned river water utility river basin conflicts that are increasingly marked by a heightened attention because of the political discourse surrounding it. In order to promote cooperation and resolve conflicts between states in a basin, policy makers must vigorously try to get the dialogue process on and avoid deadlocks in the process. Little theoretical and empirical research exists to understand when these negotiations are most effective and the mechanics behind these negotiations. Here we draw from diverse literature, economic and geographical, to capture and integrate the design elements associated with effective utility regulation along rivers on a national and international level. The utility sharing of waters of the river Cauvery has been the bone of contention of a serious conflict between the Indian states of Karnataka and Tamil Nadu. Decades of negotiations have not bore fruit till date. Even if treaties have been signed, they have been rejected and till date enforcement mechanisms are not put in place so as to hasten the negotiation process so as to avoid further escalation of irregularities in the water utilization. This study aims at defining few enforcement mechanisms based on the latest agreement brought out by the Cauvery Water Disputes Tribunal 2007 which was rejected and though appeals were filed by riparian states no amendments have been made so far. Non-Cooperative games have been used to model the regulation of the water utility and policy implications there on have been drawn out.

Keywords: Water utility; Game Theory; Prisoner's Dilemma; Stag Hunt (search for similar items in EconPapers)
JEL-codes: C72 D74 Q25 Q34 Q58 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-03
New Economics Papers: this item is included in nep-gth and nep-reg
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