Evolutionary Game and Policy Study on Operation Management of the Eastern Route of the South-to-North Water Diversion Project
南水北调东线工程运营管理的演化博弈及策略研究

Based on double angles of social responsibility and economical benefit, this paper examines the evolutionary game (EG) between government agents and corporation agents involved in the eastern route of the South-to-North Water Diversion (SNWD) Project, and analyzes replicator dynamics and its evolutionary stable strategy (ESS). In addition, stability analysis was performed. The operation management policy, accounting for the project practice of operation and management was proposed. It was suggested that: 1) the EG between government agents and corporation agents has two ESSs: (LS, HE) and (HS, LE), in which (HS, LE) is the expected evolutionary direction; and 2) for the system evolving to (HS, LE), corporation agents should transfer some resources and capacity to government agents, and the superior government should guide and control the operations and management of SNWD, keeping water safety and performing social responsibility first, including preventing and address floods, droughts and pollution, and promoting water saving mechanisms. Then, they can consider economical benefits. It could achieve win-win between social responsibility and economical benefit by this strategy. As to operation practice of the SNWD, three policy recommendations are given: 1) the government agents relevant to Jiangsu and Shandong Water Resources Department (WRD), The SNWD office acts as a control role. The WRD should own more authority, resources and capacity to implement social responsibility. That is, the WRD should make flood, drought, and pollution disaster contingency plans, establish a sound water market emergency management system, guarantee the safety of water resource projects, handle and control flood, drought and pollution disasters, and undertake corresponding monitoring, forecasting, emergency response, disposal and control of post-disaster reconstruction, maintenance and restoration work; 2) the WRD should actively promote water-saving mechanisms to coordinate the relationship between water diversion and water saving, with the objective to improve comprehensive utilization of water resources through flexible use of the water pricing policy and corresponding water-saving incentives under the pricing macro-guidance of the country; and 3) the corporation agents represent Jiangsu Shuiyuan Corporation (JSC) and Shandong Ganxian Corporation (SGC). Under the premise of water security, JSC and SGC can take into account economic benefits and maintain a low-profit status. When the SNWD runs in a normal state (e.g., no flood, drought and pollution disasters), JSC and SGC can maintain an appropriate profit through water resources regulation and market transactions. In the contrast, when the SNWD runs in an abnormal state, JSC and SGC, cooperating with the WRD, should implement flood control, drought prevention and pollution control. In this case, corresponding costs from the emergency response should be fully subsidized by the government WRD to decrease economic lo