Free-Ride and Equilibriums in a Cooperative Game of Cascade Reservoirs
Publication: Journal of Water Resources Planning and Management
Volume 150, Issue 9
Abstract
The cooperative operation of cascade reservoir systems is an efficient way to regulate water resources. However, noncooperation among various reservoir stakeholders is often observed in practice; this produces an interesting dilemma in the game of water resource management. Considering the upper Yellow River cascade reservoir system as a case study, in this paper we model and analyze the cooperation dilemma in a cascade reservoir system. In our game theoretical analysis, we find that, except for the most upstream reservoir, all reservoirs have free-ride strategies. The free-ride strategy indicates that a reservoir obtains free gain from the cooperation of other reservoirs due to spatial connections, and this fact changes the cooperative game in terms of equilibrium and benefit allocation. The results show that the regulation capacity of the free rider directly affects the equilibrium and benefit allocation of the game. A midstream reservoir with a small or medium regulation capacity tends to employ a free-ride strategy. A midstream reservoir with a large regulation capacity can entirely interrupt the cooperation between upstream and downstream reservoirs, interestingly, which can lead to the disappearance of the free-ride strategy for the midstream reservoir. However, the downstream reservoir may employ a free-ride strategy when the midstream reservoir chooses to cooperate. This implies that grand cooperation is not stable when considering free-ride, whereas partial coalitions are more likely to form. In this paper, we derive equilibrium in the cooperative game of cascade reservoirs, providing theoretical interpretation of the noncooperation phenomenon in the operation of cascade reservoirs.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
Some or all data, models, or code that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
This research was supported by the National Natural Science Foundation of China (U2243215 and 42041004) and National Key Research and Development Program of China (Grant No. 2021YFC3201204).
References
Ai, X., W. Fan, and X. Wang. 2009. “Study on the operation model and distribution of cooperation benefits of cascade reservoirs.” J. Hydroelectric Eng. 28 (3): 42–46.
Ajami, N. K., G. M. Hornberger, and D. L. Sunding. 2008. “Sustainable water resource management under hydrological uncertainty.” Water Resour. Res. 44 (11): 1–18. https://doi.org/10.1029/2007WR006736.
Ambec, S., and L. Ehlers. 2008. “Sharing a river among satiable agents.” Games Econ. Behav. 64 (1): 35–50. https://doi.org/10.1016/j.geb.2007.09.005.
Ambec, S., and Y. Sprumont. 2002. “Sharing a river.” J. Econ. Theory 107 (2): 453–462.
Bai, T., J. X. Chang, F. J. Chang, Q. Huang, Y. M. Wang, and G. S. Chen. 2015. “Synergistic gains from the multiobjective optimal operation of cascade reservoirs in the Upper Yellow River basin.” J. Hydrol. 523 (Apr): 758–767. https://doi.org/10.1016/j.jhydrol.2015.02.007.
Bai, T., J. Wei, F. J. Chang, W. Yang, and Q. Huang. 2019. “Optimize multiobjective transformation rules of water-sediment regulation for cascade reservoirs in the Upper Yellow River of China.” J. Hydrol. 577 (Oct): 123987. https://doi.org/10.1016/j.jhydrol.2019.123987.
Bogardi, I., and F. Szidarovsky. 1976. “Application of game theory in water management.” Appl. Math. Modell. 1 (1): 16–20. https://doi.org/10.1016/0307-904X(76)90018-4.
Cai, W., L. Zhang, X. Zhu, A. Zhang, J. Yin, and H. Wang. 2013. “Optimized reservoir operation to balance human and environmental requirements: A case study for the Three Gorges and Gezhouba Dams, Yangtze River basin, China.” Ecol. Inf. 18 (Nov): 40–48. https://doi.org/10.1016/j.ecoinf.2013.06.009.
Carraro, C., C. Marchiori, and A. Sgobbi. 2005. Applications of negotiation theory to water issues. Washington, DC: World Bank.
Cruz, M. P., E. C. Finardi, V. L. de Matos, and J. P. Luna. 2016. “Strategic bidding for price-maker producers in predominantly hydroelectric systems.” Electr. Power Syst. Res. 140 (Nov): 435–444. https://doi.org/10.1016/j.epsr.2016.05.032.
Davis, M., and M. Maschler. 1965. “The kernel of a cooperative game.” Nav. Res. Logist. Q. 12 (3): 223–259. https://doi.org/10.1002/nav.3800120303.
Dinar, S. 2002. “Water, security, conflict, and cooperation.” SAIS Rev. 22 (2): 229–253.
Dobson, B., T. Wagener, and F. Pianosi. 2019. “An argument-driven classification and comparison of reservoir operation optimization methods.” Adv. Water Resour. 128 (Jun): 74–86. https://doi.org/10.1016/j.advwatres.2019.04.012.
Farr, T. G., et al. 2007. “The shuttle radar topography mission.” Rev. Geophys. 45 (2): RG2004.
Fehr, E., and S. Gächter. 2002. “Altruistic punishment in humans.” Nature 415 (6868): 137–140. https://doi.org/10.1038/415137a.
Ganji, A., D. Khalili, and M. Karamouz. 2007. “Development of stochastic dynamic Nash game model for reservoir operation I. The symmetric stochastic model with perfect information.” Adv. Water Resour. 30 (3): 528–542. https://doi.org/10.1016/j.advwatres.2006.04.004.
Gately, D. 1974. “Sharing the gains from regional cooperation: A game theoretic application to planning investment in electric power.” Int. Econ. Rev. 15 (1): 195–208. https://doi.org/10.2307/2526099.
Giuliani, M., and A. Castelletti. 2013. “Assessing the value of cooperation and information exchange in large water resources systems by agent-based optimization.” Water Resour. Res. 49 (7): 3912–3926. https://doi.org/10.1002/wrcr.20287.
Giuliani, M., J. R. Lamontagne, P. M. Reed, and A. Castelletti. 2021. “A state-of-the-art review of optimal reservoir control for managing conflicting demands in a changing world.” Water Resour. Res. 57 (12): e2021WR029927. https://doi.org/10.1029/2021WR029927.
Hanasaki, N., S. Kanae, and T. Oki. 2006. “A reservoir operation scheme for global river routing models.” J. Hydrol. 327 (1): 22–41. https://doi.org/10.1016/j.jhydrol.2005.11.011.
Harsanyi, J. 1959. “A bargaining model for the cooperative n-person game.” In Contributions to the theory of games 4, 325–356. Princeton, NJ: Princeton University Press.
Hipel, K. W., D. M. Kilgour, L. Fang, and X. Peng. 1997. “The decision support system GMCR in environmental conflict management.” Appl. Math. Comput. 83 (2–3): 117–152. https://doi.org/10.1016/S0096-3003(96)00170-1.
Huang, X., X. Chen, and P. Huang. 2018. “Research on fuzzy cooperative game model of allocation of pollution discharge rights.” Water 10 (5): 662. https://doi.org/10.3390/w10050662.
Jia, B., P. Zhong, J. Chen, and Y. Wu. 2015. “Coordinated optimal operation model of complex flood control system.” Adv. Water Sci. 26 (4): 560–571. https://doi.org/10.14042/j.cnki.32.1309.2015.04.013.
Khakzad, H. 2019. “Repeated games for eco-friendly flushing in reservoirs.” Water Pract. Technol. 14 (3): 530–541. https://doi.org/10.2166/wpt.2019.037.
Labadie, J. W. 2004. “Optimal operation of multireservoir systems: State-of-the-art review.” J. Water Resour. Plann. Manage. 130 (2): 93–111. https://doi.org/10.1061/(ASCE)0733-9496(2004)130:2(93).
Labadie, J. W. 2005. “Closure to optimal operation of multireservoir systems: State-of-the-art review?.” J. Water Resour. Plann. Manage. 131 (5): 407–408. https://doi.org/10.1061/(ASCE)0733-9496(2005)131:5(407).
Li, D., D. Long, J. Zhao, H. Lu, and Y. Hong. 2017. “Observed changes in flow regimes in the Mekong River Basin.” J. Hydrol. 551 (Aug): 217–232. https://doi.org/10.1016/j.jhydrol.2017.05.061.
Li, D., W. Wan, and J. Zhao. 2018. “Optimizing environmental flow operations based on explicit quantification of IHA parameters.” J. Hydrol. 563 (Aug): 510–522. https://doi.org/10.1016/j.jhydrol.2018.06.031.
Li, D., J. Zhao, and R. S. Govindaraju. 2019. “Water benefits sharing under transboundary cooperation in the Lancang-Mekong River Basin.” J. Hydrol. 577 (Oct): 123989. https://doi.org/10.1016/j.jhydrol.2019.123989.
Madani, K. 2010. “Game theory and water resources.” J. Hydrol. 381 (3–4): 225–238. https://doi.org/10.1016/j.jhydrol.2009.11.045.
Madani, K. 2011. “Hydropower licensing and climate change: Insights from cooperative game theory.” Adv. Water Resour. 34 (2): 174–183. https://doi.org/10.1016/j.advwatres.2010.10.003.
Madani, K., and K. W. Hipel. 2011. “Noncooperative stability definitions for strategic analysis of generic water resources conflicts.” Water Resour. Manage. 25 (8): 1949–1977. https://doi.org/10.1007/s11269-011-9783-4.
Madani, K., and M. Hooshyar. 2014. “A game theory–reinforcement learning (GT–RL) method to develop optimal operation policies for multi-operator reservoir systems.” J. Hydrol. 519 (Nov): 732–742. https://doi.org/10.1016/j.jhydrol.2014.07.061.
Madani, K., and J. R. Lund. 2011. “A Monte-Carlo game theoretic approach for multi-criteria decision making under uncertainty.” Adv. Water Resour. 34 (5): 607–616. https://doi.org/10.1016/j.advwatres.2011.02.009.
McGinty, M. 2014. “Strategic incentives in teams: Implications of returns to scale.” South. Econ. J. 81 (2): 474–488. https://doi.org/10.4284/0038-4038-2013.099.
Nash, J. 1950. “The bargaining problem.” Econometrica 18 (2): 155–162. https://doi.org/10.2307/1907266.
Nash, J. 1951. “Noncooperative games.” Ann. Math. 54 (2): 286–295. https://doi.org/10.2307/1969529.
Nash, J. 1953. “Two-person cooperative games.” Econometrica 21 (1): 128–140. https://doi.org/10.2307/1906951.
Nash, J., and O. Morgenstern. 1950. Theory of games and economic behavior. Princeton, NJ: Princeton University Press.
Neumann, J. V., and O. Morgenstern. 1944. Theory of games and economic behavior. Princeton, NJ: Princeton University Press.
Olson, M. 1965. The logic of collective action. Cambridge, MA: Harvard University Press.
Oviedo, J. 2000. “The core of a repeated n-person cooperative game.” Eur. J. Oper. Res. 127 (3): 519–524. https://doi.org/10.1016/S0377-2217(99)00335-5.
Padowski, J., S. Gorelick, B. Thompson, S. Rozelle, and S. Fendorf. 2015. “Assessment of human-natural system characteristics influencing global freshwater supply vulnerability.” Environ. Res. Lett. 10 (10): 104014. https://doi.org/10.1088/1748-9326/10/10/104014.
Parrachino, I., A. Dinar, and F. Patrone. 2006. “Cooperative game theory and its application to natural, environmental, and water resource issues: 3.” In Application to water resources. Washington, DC: World Bank.
Pecorino, P. 2015. “Olson’s logic of collective action at fifty.” Public Choice 162 (3–4): 243–262. https://doi.org/10.1007/s11127-014-0186-y.
Peng, Y., C. Ji, and R. Gu. 2014. “A multi-objective optimization model for coordinated regulation of flow and sediment in cascade reservoirs.” Water Resour. Manage. 28 (12): 4019–4033. https://doi.org/10.1007/s11269-014-0724-x.
Pollitt, M. G. 2012. “Lessons from the history of independent system operators in the energy sector.” Energy Policy 47 (Jun): 32–48. https://doi.org/10.1016/j.enpol.2012.04.007.
Read, L., K. Madani, and B. Inanloo. 2014. “Optimality versus stability in water resource allocation.” J. Environ. Manage. 133 (Jan): 343–354. https://doi.org/10.1016/j.jenvman.2013.11.045.
Sadegh, M., N. Mahjouri, and R. Kerachian. 2010. “Optimal inter-basin water allocation using crisp and fuzzy Shapley games.” Water Resour. Manage. 24 (10): 2291–2310. https://doi.org/10.1007/s11269-009-9552-9.
Salazar, R., F. Szidarovszky, E. J. Coppola, and A. Rojano. 2007. “Application of game theory for a groundwater conflict in Mexico.” J. Environ. Manage. 84 (4): 560–571. https://doi.org/10.1016/j.jenvman.2006.07.011.
Salazar, R., F. Szidarovszky, and A. Rojano. 2010. “Water distribution scenarios in the Mexican valley.” Water Resour. Manage. 24 (12): 2959–2970. https://doi.org/10.1007/s11269-010-9589-9.
Schmeidler, D. 1969. “The nucleolus of a characteristic function game.” SIAM J. Appl. Math. 17 (6): 1163–1170. https://doi.org/10.1137/0117107.
Shan, R., C. Sasthav, X. Wang, and L. M. M. Lima. 2020. “Complementary relationship between small-hydropower and increasing penetration of solar photovoltaics: Evidence from CAISO.” Renewable Energy 155 (Aug): 1139–1146. https://doi.org/10.1016/j.renene.2020.04.008.
Shapley, L. S. 1953. “A value for n-person games.” Ann. Math. Stud. 28 (Apr): 307–317. https://doi.org/10.1515/9781400829156-012.
Shapley, L. S., and M. Shubik. 1954. “A method for evaluating the distribution of power in a committee system.” Am. Polit. Sci. Rev. 48 (3): 787–792. https://doi.org/10.2307/1951053.
Sheikhmohammady, M., D. M. Kilgour, and K. W. Hipel. 2010. “Modeling the Caspian Sea negotiations.” Group Decis. Negotiation 19 (2): 149–168. https://doi.org/10.1007/s10726-008-9121-2.
Souza Filho, F. A., U. Lall, and R. L. L. Porto. 2008. “Role of price and enforcement in water allocation: Insights from game theory.” Water Resour. Res. 44 (12): 61–63. https://doi.org/10.1029/2007WR006163.
Stedinger, J. R., B. A. Faber, and J. R. Lamontagne. 2013. “Developments in stochastic dynamic programming for reservoir operation optimization.” In World environmental and water resources congress 2013: Showcasing the future. 1266–1278. Reston, VA: ASCE.
Tu, M. Y., N. S. Hsu, and W. W. G. Yeh. 2003. “Optimization of reservoir management and operation with hedging rules.” J. Water Resour. Plann. Manage. 129 (2): 86–97. https://doi.org/10.1061/(ASCE)0733-9496(2003)129:2(86).
Wang, Y., F. Tang, E. Jiang, X. Wang, and J. Zhao. 2022. “Optimizing hydropower generation and sediment transport in Yellow River basin via cooperative game theory.” J. Hydrol. 614 (Nov): 128581. https://doi.org/10.1016/j.jhydrol.2022.128581.
Wu, X., S. Li, C. Cheng, S. Miao, and Q. Ying. 2019. “Simulation-optimization model to derive operation rules of multiple cascaded reservoirs for Nash equilibrium.” J. Water Resour. Plann. Manage. 145 (5): 04019013. https://doi.org/10.1061/(ASCE)WR.1943-5452.0001057.
Wu, X., and D. Whittington. 2006. “Incentive compatibility and conflict resolution in international river basins: A case study of the Nile Basin.” Water Resour. Res. 42 (2): 6–60. https://doi.org/10.1029/2005WR004238.
Xu, Y., X. Fu, and J. Qin. 2018. “Qualifying coordination mechanism for cascade-reservoir operation with a new game-theoretical methodology.” Water 10 (12): 1857. https://doi.org/10.3390/w10121857.
Yu, P. S., and T. C. Yang. 2000. “Using synthetic flow duration curves for rainfall-runoff model calibration at ungauged sites.” Hydrol. Process. 14 (1): 117–133. https://doi.org/10.1002/(SICI)1099-1085(200001)14:1%3C117::AID-HYP914%3E3.0.CO;2-Q.
Yu, Y., J. Zhao, D. Li, and Z. Wang. 2019. “Effects of hydrologic conditions and reservoir operation on transboundary cooperation in the Lancang–Mekong River basin.” J. Water Resour. Plann. Manage. 145 (6): 04019020. https://doi.org/10.1061/(ASCE)WR.1943-5452.0001075.
Zhao, T., and J. Zhao. 2014. “Improved multiple-objective dynamic programming model for reservoir operation optimization.” J. Hydroinf. 16 (5): 1142–1157. https://doi.org/10.2166/hydro.2014.004.
Zhao, T., J. Zhao, D. Yang, and H. Wang. 2013. “Generalized martingale model of the uncertainty evolution of streamflow forecasts.” Adv. Water Resour. 57 (Jul): 41–51. https://doi.org/10.1016/j.advwatres.2013.03.008.
Zhou, Y., and S. Guo. 2013. “Incorporating ecological requirement into multipurpose reservoir operating rule curves for adaptation to climate change.” J. Hydrol. 498 (Aug): 153–164. https://doi.org/10.1016/j.jhydrol.2013.06.028.
Zhou, Y., S. Guo, C. Xu, P. Liu, and H. Qin. 2015. “Deriving joint optimal refill rules for cascade reservoirs with multiobjective evaluation.” J. Hydrol. 524 (May): 166–181. https://doi.org/10.1016/j.jhydrol.2015.02.034.
Information & Authors
Information
Published In
Copyright
© 2024 American Society of Civil Engineers.
History
Received: Dec 8, 2023
Accepted: Apr 3, 2024
Published online: Jul 13, 2024
Published in print: Sep 1, 2024
Discussion open until: Dec 13, 2024
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.