Buying spatially-coordinated ecosystem services : an experiment on the role of auction format and communication
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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 because it is easier to construct long corridors. 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.
Krawczyk , M , Bartczak , A , Hanley , N D & Stenger , A 2016 , ' Buying spatially-coordinated ecosystem services : an experiment on the role of auction format and communication ' Ecological Economics , vol. 124 , pp. 36 - 48 . https://doi.org/10.1016/j.ecolecon.2016.01.012
Copyright © 2016 Elsevier B.V. All rights reserved. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://dx.doi.org/10.1016/j.ecolecon.2016.01.012
DescriptionThe study was carried out as a part of the NEWFOREX project (New Ways to Value and Market Forest Externalities, FP7-KBBE-2009-3, Project no. 243950). It was also supported by the French National Research Agency (ANR) as part of the "Investissements d’Avenir" program (ANR-11-LABX-0002-01, Lab of Excellence ARBRE).
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