Summary

Water is essential to life and development in terms of both quantity and quality. Water resources continue to face various pressures brought about by climate change, growing population, and increased economic demand for water. Managing this unique and precious resource has become a global challenge. The conflicts over water issues often arise not only among stakeholders facing limited water resources but also from social and political aspects of the design, operation, and management of water supply projects. A fair and sustainable system of sharing water resources, therefore, is one of the greatest challenges we face in the 21st century. In the absence of negotiation and lack of clear property rights, water is a source for human conflicts.

Game theory as strategic analysis has provided powerful tools and been applied to many fields, including water resources management. The basic assumptions of game theory emphasize that rational players who pursue well-defined objectives and assume knowledge of others would accordingly form expectations of other decision makers’ behavior. Hence, game theory is used to predict agents’ behaviors toward fulfilling their own interests during the interactive decision-making process with other agents.

Since the 1950s, game theory has become an important tool for analyzing important aspects of water resource management. Yet despite the rapid increase in the application of game theoretical approaches to water resource management, many challenges remain. The challenges of the early 21st century, including resource constraints, financial instability, inequalities within and between countries, and environmental degradation, present opportunities to address and reach resolutions on how water is governed and managed to ensure that everyone has sufficient access to water.