| By: |
Anna Bartczak (Faculty of Economic Sciences - University of Warsaw; Warsaw Ecological Economics Center);
Warsaw Ecological Economics Center;
Michal Krawczyk (Faculty of Economic Sciences - University of Warsaw; Warsaw Ecological Economics Center);
Nick Hanley (Department of Geography and Sustainable Development - University of St Andrews);
Anne Stenger (Laboratoire d'Economie Forestière, INRA - AgroParisTech) |
| Abstract: |
Procurement auctions are one of several policy tools available to incentivise
the provision of ecosystem services and biodiversity conservation. Successful
biodiversity conservation often requires a landscape-scale approach and the
spatial coordination of participation, for example in the creation of wildlife
corridors. In this paper, we use a laboratory experiment to explore two
features of procurement auctions in a forest landscape—the pricing mechanism
(uniform vs. discriminatory) and availability of communication (chat) between
potential sellers. We modify the experimental design developed by Reeson et
al. (2011) by introducing uncertainty (and hence heterogeneity) in the
production value of forest sites as well as an automated, endogenous stopping
rule. We find that discriminatory pricing yields to greater environmental
benefits per government dollar spent, chiefly due to better coordination
between owners of adjacent plots. Chat also facilitates such coordination but
also seems to encourage collusion in sustaining high prices for the most
environmentally attractive plots. These two effects offset each other, making
chat neutral from the viewpoint of maximizing environmental effect per dollar
spent. |
| Keywords: |
conservation auctions, spatial coordination, chat in experiments, discriminatory and uniform auctions, biodiversity conservation, provision of ecosystem services |
| JEL: |
C92 D44 Q23 Q57 Q58 |
| Date: |
2014–11 |
| URL: |
http://d.repec.org/n?u=RePEc:lef:wpaper:2014-11&r=exp |