Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile
AbstractField experiments were conducted with farmers in the LimarÃ Valley of Chile to test extant theory on right-to-choose auctions. Water volumes that differed by reservoir source and time of availability were offered for sale by the research team. The auctions were supplemented by protocols to elicit risk and time preferences of bidders. We find that the right-to-choose auctions raise significantly more revenue than the benchmark sequential auction. Risk attitudes explain a substantial amount of the difference in bidding between auction institutions, consonant with received theory. The auction bidding revealed distinct preferences for water types, which has implications for market re-design.
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Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 39 (2010)
Issue (Month): 2 (April)
water market; field experiment; auction design; Farm Management; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy; Risk and Uncertainty;
Other versions of this item:
- Jonathan E. Alevy & Oscar Cristi & Oscar Melo, 2010. "Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile," Working Papers 2010-04, University of Alaska Anchorage, Department of Economics.
- Jonathan Alevy & Oscar Cristi & Oscar Melo, 2010. "Right-to-choose auctions: A field study of water markets in the limari valley of chile," Framed Field Experiments 00117, The Field Experiments Website.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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