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TO NEGOTIATE OR TO GAME THEORIZE: Negotiation vs. Game Theory Outcomes for Water Allocation Problems in the Kat Basin, South Africa

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  • Dinar, Ariel
  • Farolfi, Stefano
  • Patrone, Fioravante
  • Rowntree, Kate

Abstract

Common property resource disputes are increasing, due to increase in competition and deterioration of quality. Cooperative arrangements have long been in the center of public interest regarding the mechanisms used by communities that share them. Two main approaches have been applied separately, namely negotiation approaches and cooperative game theory. Although the two approaches depart from different directions and are based on different assumptions, they complement each other as they are based on similar principles of fairness and efficiency and can both be seen as leading to cooperative outcomes. In this paper we apply the Role-Playing Game that is a component of the Companion Modeling approach--a negotiation procedure, and Cooperative Game Theory (Shapley value and the nucleolus) to a water allocation problem in the Kat watershed in South Africa. We use simplifying assumptions to allow a comparable solution. The negotiation and the cooperative game theory provide similar trends vis a vis the various players and their outcomes. Our conclusion is that Cooperative Game Theory and Negotiation approaches may be complementary to each other.

Suggested Citation

  • Dinar, Ariel & Farolfi, Stefano & Patrone, Fioravante & Rowntree, Kate, 2006. "TO NEGOTIATE OR TO GAME THEORIZE: Negotiation vs. Game Theory Outcomes for Water Allocation Problems in the Kat Basin, South Africa," Working Papers 60888, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    • Handle: RePEc:ags:upaewp:60888
    DOI: 10.22004/ag.econ.60888
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    References listed on IDEAS

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    1. Zara, Stefano & Dinar, Ariel & Patrone, Fioravante, 2006. "Cooperative game theory and its application to natural, environmental, and water resource issues : 2. application to natural and environmental resources," Policy Research Working Paper Series 4073, The World Bank.
    2. Olivier Barreteau, 2003. "Our Companion Modelling Approach," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 6(2), pages 1-1.
    3. Carlo Carraro & Carmen Marchiori & Alessandra Sgobbi, 2005. "Applications of Negotiation Theory to Water Issues," Working Papers 2005.65, Fondazione Eni Enrico Mattei.
    4. Parrachino, Irene & Dinar, Ariel & Patrone, Fioravante, 2006. "Cooperative game theory and its application to natural, environmental, and water resource issues : 3. application to water resources," Policy Research Working Paper Series 4074, The World Bank.
    5. Anne Dray & Pascal Perez & Natalie Jones & Christophe Le Page & Patrick D'aquino & Ian White & Titeem Auatabu, 2006. "The AtollGame Experience: from Knowledge Engineering to a Computer-Assisted Role Playing Game," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 9(1), pages 1-6.
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