Transboundary water resources are crucial in ensuring people have an adequate water supply. These shared resources need to be managed in a sustainable, equitable, and collaborative manner. The focus of this study is on Tigris-Euphrates River Basin, where the situation is particularly difficult due to climate change, weak cooperation among riparian countries, intensive hydropower development, inefficient agricultural practices, and political instability. This study evaluates the economic outcomes of transboundary water allocation scenarios under alternative climate futures and considers cooperation plans that can be implemented to reduce controversies over water allocation in the Tigris-Euphrates River Basin. In addition to the contribution to resource policy literature, this study offers a unique coupling of a complex economic model with a hydrological model.