Spatial Coordination and Joint Bidding in Conservation Auctions

Simanti Banerjee, Timothy N. Cason, Frans P. de Vries, Nick Hanley

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Spatial coordination of land use change is pivotal in agri-environmental policy to improve the delivery of environmental goods. This paper implements a laboratory experiment to study spatial coordination in a conservation auction. In addition to letting individual producers bid competitively against each other to supply environmental goods, we ask whether opportunities for joint bidding can enhance spatial coordination in the auction cost-effectively. Auction performance depends on the nature of incentives for individual bids; in particular, whether an agglomeration bonus is of-fered for individual bids. With an individual bonus in place, joint bidding gives no im-provement in either environmental benefits procured or cost-effectiveness. Absent an individual bonus, joint bidding improves environmental performance but can decrease cost-effectiveness. Further, across both individual and joint bidding treatments, the average environmental benefits, degree of spatial coordination, and cost-effectiveness are greater, and amount of seller markups lower, with multiple-round bidding com-pared to single-round bidding.

Original languageEnglish (US)
Pages (from-to)1013-1049
Number of pages37
JournalJournal of the Association of Environmental and Resource Economists
Volume8
Issue number5
DOIs
StatePublished - Sep 2021

Keywords

  • agri-environmental schemes
  • communication
  • ecosystem services
  • experiment
  • networks

ASJC Scopus subject areas

  • Economics and Econometrics
  • Nature and Landscape Conservation
  • Management, Monitoring, Policy and Law

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