Multiagent systems and distributed constraint reasoning for regulatory mechanism design in water management

Many water resources systems include multiple, independent, and distributed decision makers representing different and conflicting interests. In much of the water resources literature, the operation of these systems is studied assuming a fully cooperative attitude by the parties involved and maximizing the global efficiency at the system-level. However, assuming the presence of a social planner might be questionable when multiple institutions are involved, particularly in transboundary systems. At the other extreme, totally uncoordinated strategies among institutionally independent decision makers, acting according to the principle of individual-rationality, are more often experienced in these contexts, yielding a decrease in the system-level performance. In this paper, a novel approach is proposed based on multiagent systems to support the design of regulatory mechanisms, which drive the originally fully independent decision makers towards a more coordinated and system-wide efficient situation. The agent-based model is coupled with tools and algorithms based on distributed constraint reasoning to represent the interactions between the decision makers. The approach is demonstrated on a hypothetical water allocation problem, involving several active human agents and passive ecological agents. Different regulatory mechanisms are explored in three different scenarios of water availability to quantitatively support the discussion about the efficiency-acceptability trade-off. Numerical results show that the proposed approach has a great potential to support the design of distributed solutions balancing system-level efficiency and individual-level acceptability.