Game theory and shared water resource management

Based on the "New Periodic Table" (NPT) of 2×2 order games by Robinson and Goforth (2005) this study explores all possible game structures, representing a conflict over a shared water resource between two countries. Each game is analyzed to find the possible outcomes (equilibria), Pareto-optimal outcomes, as well as dominant strategies of the players. It is explained why in practice, parties may behave in a way, resulting in Pareto-inferior outcomes and how parties may change their behavior with the structural changes of the game. Further, how parties may develop cooperative solutions through negotiations and involvement of third parties. This work provides useful policy insights into shared water resource problems and identifies the likely structure of such games in the future and the evolution path of the games.