An evolutionary game on compliant and non-compliant firms in groundwater exploitation

In this paper, we study the exploitation of a common groundwater resource in an evolutionary game approach in order to take into account the strategic interaction among the users of the water resource. The access to the common resource is not free and firms have to pay a royalty depending on quantities of water pumped. We suppose to have compliant and non-compliant firms. The first pay a royalty to pump water while the second ones pump water but do not pay royalty, facing the risk to be punished by public authority. If they are caught, the non-compliant firms pay fines and royalty proportional to their pumping extraction. The results obtained show that royalty, sanction and regulator authority's monitoring effort can have positive effects reducing the number of non-compliant firms and preserve the water table elevation.