Estimating Potential Gains to Cooperation
For Limited Water Resources Along the Rio Grande
Dennis Wichelns1, Megumi Nakao1, Alfonso Irarrazabal1, and John Montgomery2
1 Department of Resource Economics, University of Rhode Island
2 Department of Mathematics, University of Rhode Island
Phone: (401) 874-4565, Fax: (401) 782-4766, Email: dw@uri.edu
May 15, 2001
Selected Paper
American Agricultural Economics Association Annual Meeting
August 5 – August 8, 2001
Abstract
We examine the potential gains from cooperation in the withdrawal of water from the
Hueco Bolson aquifer that provides a substantial portion of municipal water supplies in
El Paso, Texas and Ciudad Juarez, Mexico. The aquifer lies beneath the international
border, and both cities operate independently regarding pumping rates and annual
withdrawals. The natural the rate of recharge has been less than the sum of annual
withdrawals since the early 1900s, and the resource likely will be depleted if current
pumping rates are maintained. Optimal pumping rates and depths are described using a
model that maximizes the sum of net benefits obtained from municipal water supplies in
both cities. Those results are compared with pumping rates and depths obtained using a
dynamic game-theory model of strategic behavior involving the two cities.
Key Words: Hueco Bolson, groundwater, transboundary resources, game theory
Estimating Potential Gains to Cooperation
For Limited Water Resources Along the Rio Grande
Introduction
El Paso, Texas and Ciudad Juarez, in the state of Chihuahua, Mexico are located
on the Rio Grande River, which forms a portion of the international border between the
United states and Mexico. Since the early 1900s, most of the surface water flowing in the
southern R