A Cooperative Game Theory Approach for Cost Allocation in Complex Water Resource Systems

In order to obtain an optimal water resource planning and management, a fair and efficient rule of cost allocation among the different water users has a very important function. Starting from a correct assignation of costs it is possible to establish the basis to define the pricing policy that considers the principles of cost recovery and the adequate contribution for the different water uses as required by the Directive 2000/60/EC (EU, 2000). The majority of cost allocation methods currently used in water resources system do not highlight the motivation of adopted criteria; so, we wonder why the users should accept an assignation which exceeds their opportunity cost or their willingness to pay (Young, 1985). The main problem searching for a commonly accepted division of costs is how to share the costs in a fair and just way providing an adequate justification of criteria of the adopted methods. Therefore, the aim of the research is to individuate an impartial and fair method for cost sharing for all the users who respect the principles of individual acceptability and general agreement and to argue for voluntary cooperation among the interested agents in order to maximize the efficiency of water resource management. In this thesis we present a methodology of water services cost allocation based on Cooperative Game Theory, which can be a very usable instrument for the decision makers in order to elaborate pricing policies for water resources systems, according to the principles of the Directive 2000/60/EC. The validation of the methodology has been realized for the water system Flumendosa-Campidano in Sardinia