Dominance Rule in Game Theory: Resolving the Cauvery River Basin Conflict Through Strategic Equilibria

Abstract

This paper applies the dominance rule from game theory to analyze the Cauvery River Basin dispute, where Karnataka (upstream) and Tamil Nadu (downstream) compete for water. By modeling the conflict as a non-cooperative game, we demonstrate Karnataka’s dominant strategy of restricting water flow, leading to a suboptimal Nash Equilibrium that harms downstream agriculture. Institutional interventionspenalties, compensation, and iterative governanceare shown to realign incentives, replacing dominance-driven conflict with Pareto-efficient cooperation. The framework offers scalable solutions for transboundary resource disputes, emphasizing adaptive policies and equitable equilibria.

Introduction

The Cauvery River Basin dispute among the Indian states of Karnataka (upstream), Tamil Nadu (downstream), Kerala, and Puducherry highlights the complexities of managing shared water resources amid competing demands for agriculture, drinking water, and hydropower. Using game theory, particularly the dominance rule, the conflict is modeled as a non-cooperative game where Karnataka’s dominant strategy is to restrict water release (maximizing its own short-term benefits), while Tamil Nadu’s best response is to litigate, resulting in a Pareto-inefficient Nash equilibrium that worsens resource depletion and tensions.

Historically rooted in colonial-era agreements, the dispute intensified with Karnataka’s dam constructions altering water flows, leading to crop losses and legal battles. The study proposes policy interventions such as penalizing dominant strategies to change incentives, compensation mechanisms (e.g., funding water-saving projects), and fostering cooperation through repeated interactions and institutions like the Cauvery Water Management Authority.

Findings show upstream dominance drives conflict but can be mitigated by legal rulings and institutional frameworks. However, challenges remain due to behavioral factors and climate variability, which complicate purely rational game-theoretic solutions.

Conclusion

This study demonstrates that dominance rule analysis is critical for resolving transboundary water conflicts. By restructuring payoffs through penalties, compensation, and iterative governance, policymakers can align individual incentives with collective sustainability. The Cauvery case offers lessons for global conflicts (e.g., Nile River disputes), emphasizing the need for adaptive institutions. Future research should integrate evolutionary game theory to address climate-driven variability.

References

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Copyright

Copyright © 2025 N. Vithya, M. S. Umamaheswari, B. Lavanya . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.