Modeling water allocation by optimisation techniques

Abstract

The descriptions of the micro-economics and welfare economics can be completed using mathematical models, such as the optimal models. On the basis of high-level synthesis approach, economists can clearly identify most important challenges and opportunities frequently encountered in natural resources economics in general and water resources economics in particular. Furthermore, mathematical modeling approach also provides economists with useful tools to design various alternatives to correct the well-known market failures such as public goods, externalities, asymmetric information etc. In this writing, we would like to present some examples models in order to illustrate this mathematical modeling approach.