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Modeling a cost/benefit allocation game in a basin-wide reservoir redevelopment as a part of water resource reallocation

The cost-benefit allocation problem in a reservoir redevelopment project is discussed. First, we discuss the differences in the need for cost-benefit allocation methods between the construction of a new reservoir and the redevelopment of an existing reservoir. Then, this problem is modeled by classifying players into two types called: the service provider type, and the owner of site type. We show that this problem can be modeled as a game with a hierarchical structure between these two types of players. Cooperative game theory with a hierarchical structure is shown to be adequately applicable to this problem. We also extend the analysis to study a game where time effects the allocation results.