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Testing and implementing the use of multiple bidding rounds in conservation auctions : a case study application

journal contribution
posted on 06.12.2017, 00:00 by John RolfeJohn Rolfe, Jill WindleJill Windle, J McCosker
Conservation auctions are typically framed as closed, discriminatory, single round, first-price auctions, and are based on the assumption that landholders will offer bids determined by their “independent private values.” Where landholders are unfamiliar with conservation tender processes and the supply of environmental services, they may find it very difficult to construct bids in this way. Bid values may be influenced by other factors, such as concerns about “winner’s curse,” a desire to capture economic rent, and premiums for risk and uncertainty factors. Sealed, single round auctions may exacerbate information gaps and uncertainty factors because of the limited information flows compared to traditional market exchanges and open, ascending auctions. In this paper, the cost efficiencies of a multiple bidding round auction for landholder management actions are explored with the use of field experiments and a conservation auction. The case study application is improved grazing managementin a rangeland area of Australia, where landholders are unfamiliar with supplying environmental services or conservation auctions. Results suggest that multiple round auctions may be associated with efficiency gains, particularly in initial rounds.

Funding

Category 2 - Other Public Sector Grants Category

History

Volume

57

Issue

3

Start Page

287

End Page

303

Number of Pages

17

eISSN

1744-7976

ISSN

0008-3976

Location

Canada

Publisher

Wiley-Blackwell

Language

en-aus

Peer Reviewed

Yes

Open Access

No

External Author Affiliations

Centre for Environmental Management; Environmental Protection Agency; Faculty of Business and Informatics; Institute for Resource Industries and Sustainability (IRIS);

Era Eligible

Yes

Journal

Canadian journal of agricultural economics.