Centralized and decentralized management of groundwater with multiple users

In this work, we investigate two groundwater inventory management schemes with multiple users in a dynamic game-theoretic structure: (i) under the centralized management scheme, users are allowed to pump water from a common aquifer with the supervision of a social planner, and (ii) under the decentralized management scheme, each user is allowed to pump water from a common aquifer making usage decisions individually in a non-cooperative fashion. This work is motivated by the work of Saak and Peterson [14], which considers a model with two identical users sharing a common aquifer over a two-period planning horizon. In our work, the model and results of Saak and Peterson [14] are generalized in several directions. We first build on and extend their work to the case of n non-identical users distributed over a common aquifer region. Furthermore, we consider two different geometric configurations overlying the aquifer, namely, the strip and the ring configurations. In each configuration, general analytical results of the optimal groundwater usage are obtained and numerical examples are discussed for both centralized and decentralized problems.

► Formulating groundwater management problems for multiple users for two periods.
► Establishing existence of Nash equilibrium and its conditions for both configurations.
► Providing closed form expressions for water consumption patterns for identical users.
► Establishing uniqueness and symmetry properties of the optimal solution in centralized problem.
► Demonstrating that coordination is not possible via a single pricing mechanism.