Available at: http://digitalcommons.calpoly.edu/theses/1682
Date of Award
MS in Agribusiness
Jay Noel, Ph.D.
California state officials have continued to warn and encourage preparedness for the growing threats of water scarcity. This puts pressure on water suppliers to develop technological and managerial solutions to alleviate the problems associated with scarcity. A recent popular management strategy for distributing water is encouraging water transfers. While there has been analyses on water transfers between large districts and agencies, little analysis has been completed for smaller scale trades, i.e. between individuals in the same water district. This analysis models an agricultural water district, based on the Berrenda Mesa Water District (BMWD). In the model, the growers in the district have the collective goal of profit maximization, and the district has the goal of maximizing revenue from agriculture. The district decides if either long term or short term transfers are allowed between growers, who themselves decide to either elect to save more water or trade more water. A game theory simulation model is used to determine the best cooperative management strategy (BCSC), which is defined as a strategy combination which is Pareto optimal and a Nash equilibrium, or Pareto optimal and there are no Nash equilibria. Ultimately, the strategy combination of the district allowing short term trades and the growers electing to sell more water is the BCSC in all tested water scarcity scenarios.