Abstract:  Within the basic constraints of the overall balance of water, ecological water and basic living water, the allocation system of water resources is to pursue the maximum effect of water utilization. The optimal allocation system of water resources allocates the total water resources in industry, agriculture and tertiary industry effectively and properly in order to make the most profit of water within the basic constraints. This paper establishes theoretical framework of water allocation system, puts forward a criterion judging the effectiveness of existing water resources and how to approach the optimal water resources allocation system, i.e. from normative viewpoint, uses mechanism design theory in order to find the smallest profit out of the systems, build cooperative game model and design the water allocation system of meeting the participation constraint and incentive compatibility constraint.

Key words: maximum of water utilization , profit out of system , water allocation system