Information and Auction Performance: A Laboratory Study of Conservation Auctions for Spatially Contiguous Land Management

Conservation auctions are used by public agencies to procure environmental friendly land uses from private landowners. We present the structure of an iterative conservation auction that ranks bids according to a scoring rule intended to procure spatially adjacent conservation land use projects. Laboratory experiments are conducted to compare the performance of this auction under two information conditions. Under one condition subjects have knowledge about the spatial goal implemented by the scoring rule and in the other case they don’t. The results indicate that rent-seeking is intensified with more information and increased bidder familiarity with the auction. Revealing the spatial information on the other hand has no impact on auction efficiency.