This study aims to make a decision about the rational option for a multipurpose dams development of the Tumen river basin so that the adjoining countries will effectively deal with the chronic problems and fully satisfy the fast growing demand of water and power. It has been thus far investigated that the interests between North Korea and China closely depend on the selected option, and they are not well compatible with each other. These situations are defined in terms of the cooperative two-person nonzero-sum game. The Nash bargaining model is then applied to contemplate the rational option, considering two scenarios of economic growth of the North Korea. After analyzing the model, it was expected that 1) two multipurpose dams must be cooperatively developed, and 2) their benefits should be allocated according to demand of each country. The authors finally suggest that a cooperative organisation be established to effectively manage the dams beyond the border of the countries.