Assessment of Water Resources Policies under Incomplete Information using Signaling Game, Case Study: ZayandehRud River Basin

Increasing water demands and climate variability in recent decades, as well as the presence of various stakeholders with conflicting goals and tendencies have resulted in serious challenges and complicated water allocation. In addition, there are some kinds of incomplete information in water resources management, which may include uncertainties about hydrological variables, available water resources, implementation of long-term plans and inter-basin water transfer projects. The existence of this information asymmetry will definitely affect the performance and decision-making of the stakeholders. So, it is necessary to consider these uncertainties in management of water resources in the basin. In this paper water allocation under asymmetric information between the ministry of energy as sender and the agriculture sector as receiver regarding implementing water desalination and transmission from the Persian Gulf to Isfahan industries has been modeled using signaling game a type of dynamic game with incomplete information. The equilibrium of the game is pooling consequently ministry of energy in all types of implementation of the national water transfer plan and unknown policies about the environmental or agricultural rights sends the same signal. The best strategy is to release only 60% of water requirements for wheat farmers from the Zayandehrood dam. On the other hand, agriculture sector should reduce their crop area by 10%. The results show that if the ministry of energy managers focus only on economic value and disregard the social, legal and environmental aspects even with this national plan will implement, they will not so inclined to afford agricultural and environmental rights.