A game model of farmers' demand for irrigation water from reservoirs in Southern Spain

Recent droughts in Spain have triggered interest in behavioural responses to drought risk due to climate change. This paper models the sharing of irrigation water from a joint reservoir as a game between farmers, since farmers demand comprises the major share of water demands. Empirical data from a dynamic recursive mathematical programming model for three case studies are used to test the hypothesis that the present institutional structure provides farmers proper incentives to minimise their water requirement for irrigation.The analysis with both an estimated static game and an empirically calibrated repeated game shows that most farmers are unlikely to conserve water used for irrigation purposes. In the case where climate change induces a higher drought risk, incentives emerge for farmers to become conservative in their demand for irrigation water, provided that proper institutional arrangements emerge which protect the share of the water saved by farmers for future use.