Article

Spatial Coordination and Joint Bidding in Conservation Auctions

Citation

Banerjee S, Cason T, de Vries F & Hanley N (2021) Spatial Coordination and Joint Bidding in Conservation Auctions. Journal of the Association of Environmental and Resource Economists. https://doi.org/10.1086/714601

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 offered for individual bids. With an individual bonus in place, joint bidding gives no improvement 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 is greater, and amount of seller markups lower, with multi-round bidding compared to single round bidding.

Notes
Output Status: Forthcoming/Available Online

Journal
Journal of the Association of Environmental and Resource Economists

StatusIn Press
FundersMarine Alliance for Science & Technology Scotland
Publication date online31/05/2021
Date accepted by journal27/03/2021
URLhttp://hdl.handle.net/1893/32514
ISSN2333-5955
eISSN2333-5963