Modeling Incentive‐Driven Cooperation in Agricultural Water Use Under Unequal Withdrawal Condition

Water allocation has long been framed as a general optimization problem in which users compete for a finite resource, leading much of the existing literature to adopt a top‐down perspective on how water should be distributed among users. However, in practice, water withdrawals may also be influenced by physical access and operational arrangements, such as direct abstraction from river channels through intake facilities for agricultural and industrial use. In such systems, disparities may arise between institutional allocation principles and effective access to water during shortage conditions, potentially creating asymmetric impacts among upstream, midstream, and downstream stakeholders. This study quantifies these impact asymmetries across river locations and evaluates stage‐based intake restriction strategies designed to mitigate inequitable outcomes during droughts. The proposed framework is applied to the Yeongsan River Basin in southwestern Korea through computational experiments to demonstrate how drought‐stage‐based intake regulations can improve both net profit and equity among stakeholders. A game‐theoretic approach is further employed to assess the potential for compensation across Pareto‐optimal solutions by examining whether the additional gains generated under cooperation are sufficient to offset stakeholder losses relative to the non‐cooperative baseline. The analysis is extended to projected scenarios of intensified climatic and socio‐economic droughts to assess the robustness of the proposed policies under future stress conditions. Through this approach, the study introduces a generalized framework for identifying water allocation policies that reconcile efficiency, equity, and sustainability under institutional and hydrologic constraints.