Fairness in resource allocation in a system of systems

Resource allocation methodologies are presented and illustrated for fairly distributing scarce resources among competing users within the framework of a system of systems. Fairness constitutes a crucial concept for effectively designing, maintaining and operating a system of systems in order to encourage cooperative behavior among users to achieve an economically, socially and environmentally sustainable system of systems. Key ideas from philosophies and principles regarding fairness are embedded into a two-stage methodology for meaningful resource allocation in a system of systems. More specifically, lexicographic minimax (or maximin) and priority-based multiple objective optimization approaches generate perfectly- and priority- fair allocations, respectively. These two techniques are adopted to develop an integrated model for fair water resources allocation in a river basin, which pursues equity in two steps: fair water rights allocation and subsequent fair reallocation of the overall net benefit obtained through economically efficient water transfers. This two-step methodology is applied to a large-scale water allocation problem in a semi-arid region of Western Canada.