Strategic Cooperation in Water Management: A Game-Theoretic Approach to Sustainable Infrastructure in Chilean Mining

Abstract

Through a game-theoretic methodology this thesis examines collaborative approaches to managing water infrastructure within Chilean mining operations. The research examines cooperative stakeholder interactions to tackle water scarcity and growing demand in Chile's mining industry among mining firms, local residents and regulatory bodies. It utilizes game theory with a focus on cooperative games and bargaining models to develop a structured analytical framework for analyzing stakeholder dynamics including their incentives and cooperative opportunities. The thesis centers on creating a mathematical model that shows stakeholders as rational entities who seek to maximize their benefits while facing resource constraints and regulatory limitations. The implementation of cooperative game theory allows for detailed examination of coalition building processes along with resource sharing agreements and benefit allocation practices which helps to define stable cooperative possibilities. The primary findings show that mining companies achieve greater efficiency gains through water infrastructure collaboration than through separate individual investments. This thesis presents quantitative evidence that partnerships among mining projects generate significant financial savings and lead to better resource usage and positive environmental and social results. Sensitivity analyses identify that cooperative stability depends on several critical factors, including the asymmetries existing in the different mining projects, the sequence in which investment decisions are made, and the transfer price for water selling for those projects that prefer free rides. The final part of the thesis presents concrete suggestions for policymakers and industry leaders to develop cooperative frameworks through specific policy mechanisms and incentive systems that support long-term collaboration. The study advances existing academic knowledge by utilizing detailed game-theoretic approaches to address practical problems in sustainable mining practices. The findings reveal that strategic partnerships serve as fundamental tools for managing resources which can effectively tackle the urgent water scarcity challenges Chile faces.