In recent days computer-assisted marketing and pricing are gaining popularity, which is commonly referred to as the smart market or model verite in agent-based computational economics. There is potential that adoption of smart market for water pricing can address some of the deficiencies that exist in the real-world. Water pricing has remained inefficient due to, at least to a large extent, the disregard of the scarcity of water resources, their opportunity and external costs, the absence of the mechanisms to incorporate the variability of demand and supply situations, effects of monopolistic operation, and slow reaction rate of water tariff changes by consumers. Due to recent advances in communication technologies and ubiquity of internet, it is possible to devise a smart market type water pricing scheme that would reflect real costs, be effective in demand management, and meet the criteria of economic efficiency, social equity and environmental sustainability beyond the level that exists today.