In a working paper, UCLA Anderson’s Felipe Caro, University of Mannheim’s Martin Glanzer and UCLA Anderson’s Kumar Rajaram develop a model for the management of reservoir systems over the long term. It’s designed to minimize societal costs of a water shortage. In a case study of California’s Sacramento River Basin, the authors’ management policy reduced average shortage costs — the cost of getting water from other, last-resort sources — by 40% compared with the current policy, potentially remarkable savings.The study focuses on three major reservoirs in the Sacramento River Basin, each with unique characteristics: Shasta Lake (slow to fill, large capacity), Trinity Lake (moderate filling rate) and Folsom Lake (the smallest of the three,  quick to fill).