Game theory model for a virtual water strategy: Scenarios under rational and semirational game play

Abstract

AbstractThe virtual water strategy (VWS) provides a theoretically feasible method to transport virtual water (VW) and balance regional differences in water resource endowments. However, the practical implementation of VWS faces selective resistance due to the lack of research in motivation analysis across potential executor regions. Game theory provides a new approach to study the decision‐making mechanism and behavioural motivation in the implementation of VWS. This study builds some semiquantitative game models to analyse the regions’ potential acceptance of VWS in decision‐making, especially concerning economic development, water sustainability, and trade patterns. The result shows the factors like external incentives and stability of game can affect the payoffs and strategy selections on VWS in rational and semirational games. To achieve a mutual benefit equilibrium towards an effective VWS framework, improvement efforts could include mechanisms for rewards or punishments, promoting long‐term cooperation, and promulgation and education.