Strategic climate adaptation economics: A game model on resilience to droughts and floods

Municipalities that have faced recurring droughts and floods for more than 50 years function as living laboratories of resilience, offering a preview of broader climate challenges ahead. This study examines how semi-urban populations coordinate and sustain resilience amid such hydroclimatic extremes. A game-theoretical framework captures the interplay between cooperation and Nature-Based Solutions (NbS) in fostering adaptation within a middle-income setting like Colombia. Based on 70 interviews and mixed-method evidence, the model portrays farmers as players navigating recurrent hydrological states—drought, flood, and moderate—choosing adaptive actions such as investing in drought-tolerant crops, selling livestock during floods, and contributing to a shared NbS capital . Payoffs weigh private adaptive returns against collective efforts, with social capital shaping the enforcement of cooperation. Equilibrium outcomes indicate that stable cooperation emerges when the discounted long-term benefits of NbS accumulation exceed the immediate incentives to defect, revealing how NbS can internalize climate externalities and anchor adaptive behavior under limited resources. A five-type resilience classification emerges: (i) weak resilient, (ii) resilient by escape, (iii) strong resilient, (iv) externally supported resilient, and (v) diversifier/experimenter. Simulation results indicate that increasing incentives for cooperation enhances sustainability; with a discount factor of 0.65 or higher, cooperation becomes optimal. Maintaining strong social ties and avoiding conflicts also enhance recovery capacity. Farmers and fishers have developed traditional NbS—such as wetland restoration and Common-Pool Resources assets maintenance—as key resilience mechanisms. Their commitment to remain in their territories underscores the importance of NbS for securing livelihoods and sustaining local adaptation. Programs aimed at addressing resilience building should be tailored to the resilience types identified locally. • People living droughts and floods in tandem for more than 50 years, provide a glimpse into the future impacts of climate change. • Nature-Based solutions to build resilience to droughts and floods are described. • This research suggests a five-type resilience classification to cope with droughts and floods • A cooperative model was developed based on the narratives of people exposed to climate extremes • A new definition on resilience to droughts and floods is proposed