Developing game theory water market models for river users

11 May 2021

With funding from the National Science Foundation, a group of researchers from University of Maryland together with consultants from Ramboll are building game theory-based water market equilibrium models to help improve water use in the watersheds of the Anacostia River in Maryland and D.C., and the Duck River in Tennessee.

Duck River

Duck River

Contact

George Rest

George Rest

PE, Senior Vice President
T: +1 301 731 1162

Tom Dumm

PE, Technical Manager
T: 1 301 748 9516

Story courtesy of University of Maryland

New management approaches are needed to improve cooperation among independent water resources users and stakeholders. This is because cooperation is not naturally incentivized – actions beneficial to upstream users often negatively impact users downstream. This makes it difficult to foster cooperation over water withdrawal rights, water quality responsibilities, and risks associated with flooding.

Historically, cooperative agreements among independent entities have required static legal agreements that create barriers to adaptation or policy improvement. This new research, funded by the National Science Foundation, will explore novel management approaches, such as market-based mechanisms, to overcome these cooperation challenges, based on game theoretic models they will develop and use. 

The researchers anticipate that the approaches’ efficiency and equity gains will benefit municipal, industrial and agricultural water users; treatment plant and network operators; and the natural environment. The Anacostia River testbed will focus on urban river restoration, while the Duck River testbed will emphasize economic development and ecological preservation.

Strategic learning algorithms for water stakeholders 

Professors from University of Maryland Brubaker will use rigorous mathematical techniques to model deterministic and stochastic water infrastructure systems from a one-level and two-level equilibrium problem perspective based on non-cooperative game theory. The developed models will combine engineering, water policy, machine learning, risk analysis, resilience planning and economic elements.

The project will account for risk and benefits in a systematic, unified, and endogenous manner across all entities and their interactions and will allow the system operator/regulator to effectively balance risk and cost under uncertain and/or changing conditions.

The researchers also anticipate the work will lead to algorithmic advances in decomposition methods for water equilibrium problems as well as stochastic equilibrium models for this general class of infrastructure equilibrium problems. A rolling-horizon, stochastic mathematical program with equilibrium constraints will develop strategic learning algorithms for water stakeholders to improve their decision-making over time.

A $553,407 grant 

Game Theoretic Modeling for Improved Management of Water and Wastewater Resources Using Equilibrium Programming and Feedback Mechanisms is a three-year, $553,407 grant from NSF’s Civil, Mechanical and Manufacturing Innovation division and Civil Infrastructure Systems program.

Team members are: ISR-affiliated Professor Steven Gabriel (ME), the principal investigator, is joined by Associate Professor Kaye Brubaker (CEE), director of the Maryland Water Resources Research Center as co-PI. The research team also includes ME doctoral student Nathan Boyd, industrial advisors from the District of Columbia Water and Sewer Authority (Matt Ries), Ramboll (George Rest, Tom Dumm), and the Tennessee Duck River Development Agency (Doug Murphy).

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