A Cooperative Game Analysis of Transboundary Hydropower Development in the Lower Mekong: Case of the 3S Sub-basins

Hydropower development has enormous economic, environmental, and social impacts at a local, national, and trans-national level. It has been suggested that transboundary water conflicts, such as those that may arise from hydropower development, may be addressed through benefit sharing. This study attempts to investigate the net benefits of hydropower development and water resources utilization in transboundary sub-basin, the Sekong, Sesan and Srepok (commonly known as 3S) sub-basin, in the Mekong River Basin using a game theory approach. This study proposes a methodology for analyzing complex transboundary river-basin issues using the game theory concepts, such as core stability and incentive compatibility. A wide range of parameters have been incorporated to define models and methodologies, and an adaptation strategy for the area has been proposed. The results suggests that benefit sharing and cooperation among the riparian countries would lead to benefits to all. It is observed that the greater the cooperation, the higher is the total benefits. External funding and optimal usage of funds will also play a critical role in this context in the near future. The results of the study will provide a basis for local policy decisions and regional planning in the Mekong River and beyond. Copyright Springer Science+Business Media Dordrecht 2014