Study on the Pricing of Water Rights Transaction between Irrigation Water Users Based on Cooperative Game in China

Abstract

China’s water rights transaction is still in the initial stage of development. There is no systematic pricing method for water rights transactions between farmers. This paper puts forward a pricing model of water rights transactions among farmers in water-deficient areas. The price of water rights transaction consists of cost price and earnings price. The earnings price is determined by studying the crop water production function, calculating the crop’s marginal benefit of the two parties, and combining the Cooperative Game Theory. Finally, the pricing model was applied to the water rights transactions among the farmers of Hetao Irrigation District of Bayannaoer City, Inner Mongolia Autonomous Region. Results showed that under the A4 trading strategy, the overall income increased without losing the interests of any farmer. The increasing income of the three farmer households N1, N2, and N3 after the alliance was 8.14 thousand dollars, 4.66 thousand dollars, and 20.33 thousand dollars, respectively, and the water rights transaction prices of N3 and N1, N2 were respectively 0.485 $/m3, 0.565 $/m3. It is estimated that the model can provide a scientific basis for water rights trading between farmers and the efficient use of water resources.

Keywords

• water rights transaction
• earnings price
• production function
• marginal benefit
• Cooperative Game Theory