The Carrot or the Stick: Water Allocation Strategies for Uzbekistan

Irrigation water is a constrained common-pool resource in Uzbekistan that leads to an increasing competition over its allocation among farmers. We examine how the management of the commons in this region affects individual strategic behavior. We conduct an experiment with farmers from Uzbekistan in which two policies are analyzed, a penalty and a bonus. The paper studies a non-cooperative game and identifies the efficient use of water for irrigation. We compare our theoretical results with the experimental observations. Our findings suggest that the penalty and bonus mechanisms are effective in reducing individual water appropriation compared to the benchmark case in which these mechanisms are absent. Finally, we identify two different effects that drive subjects’ opportunistic behavior