# **Notes**

## 1 Modified from Farolfi and Rowntree (2005).

2 “Emerging” citrus farmers are black farmers that after 1994 had the right to exploit (and not own) citrus farms located during Apartheid period in the Ciskei Bantustan and previously owned and managed by the public Bantustan’s administration.

3 The IB was substituted lately by a more participatory Water User Association (WUA) including representatives of all main groups of stakeholders in the Kat. This organization is now in charge of defining the water “business plan” indicating water allocation strategies and resource management for the catchment. While the difference between the IB and WUA may not be essential for the CGT, it is very important for the negotiation process, as will be discussed later.

4 Developing groundwater resources in the watershed would help irrigators overcome droughts. However, in this paper GW development is not considered due to need for external financial support.

5 Defined in the National Water Act as “the quantity and quality of water required to protect the aquatic ecosystems of the water resource in order to secure ecologically sustainable development and use of the resource.” 6 These portions of the catchment correspond to the three voting areas identified to nominate the Kat River Valley Water Users Association representatives (Figure 1).

7 ha=hectare. 1 ha=2.5 acre.

8 The conversion factors for the different variables range between 2.1 (Inhabitants in catchment) and 13 (Area citrus). The arbitrary choice of the conversion factors was due to the trade-off between having an RPG that represents the reality and an RPG that is “playable”. It may be noticed that players validated the RPG representation of the Kat during the first session. The only criticism was for the disproportionately high importance of domestic water consumption in the RPG compared to the real one. This issue was addressed in a second version of the RPG by changing the conversion factor of “Inhabitants in catchment” from 2.1 to 4.9.

9 For production and profit functions used in the KatAware model that supports the RPG, see the characteristic functions used also for the CGT model.

> 10 The Capital Recovery Multiplier equation used is [ _r_ ⋅ 1( + _r_ ) _t_ ]/[(1 + _r_ ) _t_ − ]1 , where _r_ is discount rate (0.06),

> and _t_ is number of years of the game ( _t_ = 6 ). 11 In this game, profit=total income-total costs. If a farmer invests in citrus plantations, therefore, his annual income during the first years of new orchards is constant (no production) whilst the costs increase. It was noticed by citrus farmers during the game debriefing that this is not really how they see things because an investment is calculated as a positive asset in their budget, whereas here is a negative (cost) one. They suggested calling “cash-flow” what we call “profit” in the game outcomes.

12 Face given prices rather than affecting the prices in the market.

13 We should stress that the formulation of our CGT problem allows considering longer time horizons by creating for each player and coalitions optimization problems that span over T years but what the player considers is the expected annualized value.

14 We assume that the ecological reserve serves both for environmental health in the Kat River and for releases into the Fish River’s estuary.

15 A multi-year problem will be developed in our future work.

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