Economic and mathematical coordination models for water consumption strategies of economic agents

Economic & mathematical methods and models

The article examines the application of economic-mathematical methods for the coordination of the interests of the subjects of the Russian Federation in the allocation of limited water resources in the basin of the Don River. The regions located in the basin of the Don are among the most economically developed and densely populated areas of the Russian Federation. In this regard, the problem of providing the population and industries of these areas with water is one of the most important. This work aims at designing a system of tools to support administrative decision-making in respect of the allocation of limited water resources among the regions of the Don River basin, acting as economic agents. When making the choice of the tools, the specifics of supplying individual water users were factored in. To solve such problems, economic-mathematical methods should be applied as they allow developing a solution to the issues of interregional cooperation on the basis of optimal decision-making relying  on the development indicators of regional economies. The task of resource allocation involves a preliminary review of the group of economic entities close to each other in terms of socio-economic development, i.e.  consumers of the resource, and then the distribution of water resources within the split groups by employing a priority mechanism. This problem can be handled with the help of the game-theoretic model where Nash-Stackelberg equilibrium solutions involve mixed strategies. The proposed approach is a tool to facilitate decision-making, it allows the governing body to increase the validity of management decisions on water allocation in specific situations, which is essential for organizations operating under conditions of uncertainty and information asymmetry.