Information access, conservation practice choice, and rent seeking in conservation procurement auctions: Evidence from a laboratory experiment

Simanti Banerjee, Marc N. Conte

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Existing research emphasizes the sensitivity of conservation auction performance and bidder behavior to auction design choices, as these auctions are not incentive compatible, meaning rent seeking must be controlled. Procuring agencies must decide how to provide bidders with information about the environmental quality of different conservation practices to manage the trade-off between an increased probability of selecting the optimal practice and increased rent-seeking behavior associated with this information. We use an induced-value laboratory experiment to explore how access to quality information and variation in the bid-submission protocol can best be combined to improve auction performance. We find that the auction performs best when a bid-menu format, in which participants submit bids for all their practices, is combined with information about the environmental quality rank of available conservation practices.

Original languageEnglish (US)
Pages (from-to)1407-1426
Number of pages20
JournalAmerican Journal of Agricultural Economics
Volume100
Issue number5
DOIs
StatePublished - Oct 2018

Keywords

  • Information asymmetry
  • Iterative auctions
  • Multi-attribute auctions
  • Payment for ecosystem services programs

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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