Previous models optimize short‐, intermediate‐, and long‐run irrigation decision making in a simplified river valley system characterized by highly variable water supplies and demands for a single decision maker controlling both reservoir releases and farm water use. A major problem in relaxing the assumption of one decision maker is communicating the stochastic nature of supplies and demands between reservoir and farm managers. In this paper, an optimizing model is used to develop release rules for reservoir management when all users share equally in releases, and computer simulation is used to generate an historical time sequence of announced releases. These announced releases become a state variable in a farm management model which optimizes farm area‐to‐irrigate decisions through time. Such modeling envisages the use of growing area climatic data by the reservoir authority to gauge water demand and the transfer of water supply data from reservoir to farm managers via computer data files. Alternative model forms, including allocating water on a priority basis, are discussed briefly. Results show lower mean aggregate farm income and lower variance of aggregate farm income than in the single decision‐maker case. This short‐run economic efficiency loss coupled with likely long‐run economic efficiency losses due to the attenuated nature of property rights indicates the need for quite different ways of integrating reservoir and
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