Abstract: Establishing a fair, efficient and reasonable mechanism of allocating incremental benefit is the key to enhancing optimal joint operations of a multi-reservoir system owned by multiple stakeholders. Based on this principle, an incremental benefit allocation model is developed in this study using the bargaining theory. We derive optimal solutions of the model using the first-order optimality condition, and reveal that the optimal benefit allocation plan meets the conditions of equivalent quasi-slope on each stakeholder’s utility function. Compared to the allocation plans based on the proportional allocation model and Shapley model, the results show that allocation plans of this bargaining model are determined by the interval of each stakeholder’s benefit distribution and the effectiveness of sub-coalition constraints. If the benefit contribution of the sub-coalition is low, the incremental benefit allocated to a stakeholder is positively correlated with its interval of benefit allocation, while when this contribution is high, a high priority will be granted to allocating the excessive benefits of the reservoirs within the sub-coalition. The differences among various methods are generally influenced by how the equality is defined. The incremental benefit allocation plan generated by the bargaining model is highly homogenized to all the reservoirs, and thus ensures the benefit of those weak stakeholders.