Nation-states rarely go to war over water, but it is also rare that
water conflicts in an international river basin are resolved
through cooperation among the riparian countries that use the
shared resources. One interpretation for the lack of success is
that the magnitude of potential gains from cooperation is largely
unknown for most international rivers, and riparian countries may
have an incomplete or even inaccurate knowledge of cooperative
opportunities. In addition, gains from cooperation will mean little
to individual riparians unless the required cooperative behaviors
are incentive compatible. Game theory offers useful insights for
assessing cooperative solutions for water conflicts in
international river basins. Applying cooperative game theory
concepts such as core, nucleolus, and Shapley value to Nile water
conflicts, we examine the incentive structure of both cooperative
and noncooperative strategies for different riparian countries and
establish some baseline conditions for incentive-compatible
cooperation in the Nile basin.
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