Water Resource Allocation in Critical Scarcity Conditions: A Bankruptcy Game Approach

Water resource allocation in critical scarcity conditions represents a common problem in water-system management in Mediterranean regions. This article describes a methodology for the allocation of scarce resources in a complex supply system by using the Bankruptcy Games techniques. A classical bankruptcy problem arises from a situation in which some agents have claims on the available estate to be divided, such that each agent might receive a non-negative amount that cannot exceed its claim. The methodological approach described in this article is linked to Cooperative Games Theory and allows theevaluation of a sharing rule for goods that are not sufficient to satisfy the total requests of the users in the system. Moreover, a new criterion is developed that, in resource allocation, privileges those users with higher priority. Users’ willingness to pay is considered to definepriority; the methodology can be considered innovative in this field of research. This approachhas been applied in water resource systems using critical scarcity scenarios: initially, asimplified water system is used; then, the complex and multi-purpose Tirso-Flumendosa-Campidano water system in southern Sardinia, Italy, is examined.