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Cost Allocation of Multiagency Water Resource Projects: Game Theoretic Approaches and Case Study
Author(s) -
Lejano Raul P.,
Davos Climis A.
Publication year - 1995
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/95wr00322
Subject(s) - shapley value , cooperative game theory , yield (engineering) , resource (disambiguation) , game theory , cost allocation , reuse , rationality , environmental economics , value (mathematics) , resource allocation , computer science , operations research , microeconomics , economics , mathematics , engineering , management , computer network , materials science , machine learning , law , political science , metallurgy , waste management
Water resource projects are often jointly carried out by a number of communities and agencies. Participation in a joint project depends on how costs are allocated among the participants and how cost shares compare with the cost of independent projects. Cooperative N ‐person game theory offers approaches which yield cost allocations that satisfy rationality conditions favoring participation. A new solution concept, the normalized nucleolus, is discussed and applied to a water reuse project in southern California. Results obtained with the normalized nucleolus are compared with those derived with more traditional solution concepts, namely, the nucleolus and the Shapley value.