chapter  1
10 Pages

Policy and Strategy in Water Resource Management: Can We Do Better When Both Are Coordinated?

ByAriel Dinar, Jose Albiac

In the summer of 2006, a group of economists and game theorists met in Zaragoza, Spain, to present their works as part of the ‘sixth meeting of game theory and practice dedicated to development, natural resources and the environment’.1 The purpose of that meeting was to demonstrate the usefulness and policy relevance of game theory applications in natural resources and the environment. Indeed, as extraction rates and utilization of natural resources such as land, water and other resources are exceeding sustainable levels, the likelihood of disagreements among stakeholders arises. In such situations policies are urgently needed, but policy makers are faced with the diffi cult task of accommodating opposed interests. Thus, a need for trade-offs and political decisions is unavoidable. This is a set of conditions where game theory and strategic behaviour are very valuable.