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This paper reviews various applications of cooperative game theory (CGT) to issues of water resources. With an increase in the competition over various water resources, the incidents of disputes have been in the center of allocation agreements. The paper reviews the cases of various water uses, such as multi-objective water projects, irrigation, groundwater, hydropower, urban water supply, wastewater, and transboundary water disputes. In addition to providing examples of cooperative solutions to allocation problems, the conclusion from this review suggests that cooperation over scarce water resources is possible under a variety of physical conditions and institutional arrangements. In particular, the various approaches for cost sharing and for allocation of physical water infrastructure and flow can serve as a basis for stable and efficient agreement, such that long-term investments in water projects are profitable and sustainable. The latter point is especially important, given recent developments in water policy in various countries and regional institutions such as the European Union (Water Framework Directive), calling for full cost recovery of investments and operation and maintenance in water projects. The CGT approaches discussed and demonstrated in this paper can provide a solid basis for finding possible and stable cost-sharing arrangements.

Cost Recovery --- Cost Sharing --- Economic Theory and Research --- Environment --- Environmental Economics and Policies --- Industry --- Law and Development --- Macroeconomics and Economic Growth --- Marginal Cost --- Municipalities --- Public Works --- Sanitation and Sewerage --- Town Water Supply and Sanitation --- Urban Water --- Urban Water Supply --- Wastewater Treatment --- Water --- Water and Industry --- Water Conservation --- Water Consumption --- Water Infrastructure --- Water Law --- Water Policy --- Water Projects --- Water Resource --- Water Resources --- Water Rights --- Water Sector --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Supply and Systems --- Water Supply Facilities --- Water Supply System --- Water Supply Systems

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This paper provides a review of various applications of cooperative game theory (CGT) to issues of natural and environmental resources. With an increase in the level of competition over environmental and natural resources, the incidents of disputes have been at the center of allocation agreements. The paper reviews the cases of common pool resources such as fisheries and forests, and cases of environmental pollution such as acid rain, flow, and stock pollution. In addition to providing examples of cooperative solutions to allocation problems, the conclusion from this review suggests that cooperation over scarce environmental and natural resources is possible under a variety of physical conditions and institutional arrangements. CGT applications to international fishery disputes are especially useful in that they have been making headway in policy-related agreements among states and regions of the world. Forest applications are more local in nature, but of great relevance in solving disputes among communities and various levels of governments.

Acid Rain --- Agriculture --- Biological Models --- Common Property Resource Development --- Debt Markets --- Economic Theory and Research --- Economics --- Environment --- Environmental --- Environmental Economics and Policies --- Environmental Issues --- Environmental Problems --- Environmental Resources --- Externalities --- Finance and Financial Sector Development --- Fisheries --- Fisheries and Aquaculture --- Forest Management --- Labor Policies --- Macroeconomics and Economic Growth --- Models --- Natural Resources --- Oceans --- Pollution --- Private Goods --- Production --- Public Good --- Public Goods --- Rural Development --- Social Protections and Labor --- Supply --- Water --- Water Resources

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This paper reviews various applications of cooperative game theory (CGT) to issues of water resources. With an increase in the competition over various water resources, the incidents of disputes have been in the center of allocation agreements. The paper reviews the cases of various water uses, such as multi-objective water projects, irrigation, groundwater, hydropower, urban water supply, wastewater, and transboundary water disputes. In addition to providing examples of cooperative solutions to allocation problems, the conclusion from this review suggests that cooperation over scarce water resources is possible under a variety of physical conditions and institutional arrangements. In particular, the various approaches for cost sharing and for allocation of physical water infrastructure and flow can serve as a basis for stable and efficient agreement, such that long-term investments in water projects are profitable and sustainable. The latter point is especially important, given recent developments in water policy in various countries and regional institutions such as the European Union (Water Framework Directive), calling for full cost recovery of investments and operation and maintenance in water projects. The CGT approaches discussed and demonstrated in this paper can provide a solid basis for finding possible and stable cost-sharing arrangements.

Cost Recovery --- Cost Sharing --- Economic Theory and Research --- Environment --- Environmental Economics and Policies --- Industry --- Law and Development --- Macroeconomics and Economic Growth --- Marginal Cost --- Municipalities --- Public Works --- Sanitation and Sewerage --- Town Water Supply and Sanitation --- Urban Water --- Urban Water Supply --- Wastewater Treatment --- Water --- Water and Industry --- Water Conservation --- Water Consumption --- Water Infrastructure --- Water Law --- Water Policy --- Water Projects --- Water Resource --- Water Resources --- Water Rights --- Water Sector --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Supply and Systems --- Water Supply Facilities --- Water Supply System --- Water Supply Systems

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Game theory provides useful insights into the way parties that share a scarce resource may plan their use of the resource under different situations. This review provides a brief and self-contained introduction to the theory of cooperative games. It can be used to get acquainted with the basics of cooperative games. Its goal is also to provide a basic introduction to this theory, in connection with a couple of surveys that analyze its use in the context of environmental problems and models. The main models (bargaining games, transfer utility, and non-transfer utility games) and issues and solutions are considered: bargaining solutions, single-value solutions like the Shapley value and the nucleolus, and multi-value solutions such as the core. The cooperative game theory (CGT) models that are reviewed in this paper favor solutions that include all possible players and ignore the strategic stages leading to coalition building. They focus on the possible results of the cooperation by answering questions such as: Which coalitions can be formed? And how can the coalitional gains be divided to secure a sustainable agreement? An important aspect associated with the solution concepts of CGT is the equitable and fair sharing of the cooperation gains.

Economic Theory and Research --- Economics --- Efficiency --- Environment --- Environmental --- Environmental Amenities --- Environmental Economics and Policies --- Environmental Issues --- Environmental Problems --- Environmental Resources --- Equity --- Expectations --- Labor Policies --- Macroeconomics and Economic Growth --- Models --- Natural Resources --- Outcomes --- Production --- Property --- Social Protections and Labor --- Supply --- Taking --- Utility Functions --- Values --- Water