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Quality Information and Procurement Auction Outcomes: Evidence from a Payment for Ecosystem Services Laboratory Experiment

Author

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  • Marc N. Conte
  • Robert M. Griffin

Abstract

Procuring agencies in conservation auctions typically have more information about the ecosystem service (ES) quality of conservation actions than landowners and can affect auction outcomes by controlling participants’ access to this information. Our induced-value laboratory auction experiment explores the impact of sellers’ access to ES-quality information on auction efficiency when the conservation action choice is endogenous to offer formation. We find that providing ES-quality information allows sellers to identify and submit higher-quality conservation actions, an effect that counteracts previously identified efficiency losses from information rents.

Suggested Citation

  • Marc N. Conte & Robert M. Griffin, 2017. "Quality Information and Procurement Auction Outcomes: Evidence from a Payment for Ecosystem Services Laboratory Experiment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 571-591.
    • Handle: RePEc:oup:ajagec:v:99:y:2017:i:3:p:571-591.
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    File URL: http://hdl.handle.net/10.1093/ajae/aaw096
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    Citations

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    Cited by:

    1. Ito, Nobuyuki, 2023. "Can market segmentation improve the performance of water quality trading auction? A laboratory experiment," Ecological Economics, Elsevier, vol. 213(C).
    2. Wallander, Steven & Hellerstein, Daniel M. & Johnsen, Reid, 2018. "Cost Effectiveness of Conservation Auctions Revisited: The Benefits of Information Rents," 2018 Annual Meeting, August 5-7, Washington, D.C. 274457, Agricultural and Applied Economics Association.
    3. Marc N. Conte & Robert Griffin, 2019. "Private Benefits of Conservation and Procurement Auction Performance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 759-790, July.
    4. Pengfei Liu, 2021. "Balancing Cost Effectiveness and Incentive Properties in Conservation Auctions: Experimental Evidence from Three Multi-award Reverse Auction Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(3), pages 417-451, March.
    5. Pratt, Bryan & Wallander, Steven, 2022. "Cover Practice Definitions and Incentives in the Conservation Reserve Program," USDA Miscellaneous 323862, United States Department of Agriculture.
    6. Karsyn Lamb & Kristiana Hansen & Christopher Bastian & Amy Nagler & Chian Jones Ritten, 2019. "Investigating Potential Impacts of Credit Failure Risk Mitigation on Habitat Exchange Outcomes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 815-842, July.
    7. Pratt, Bryan & Wallander, Steven, 2022. "Cover Practice Definitions and Incentives in the Conservation Reserve Program," Economic Information Bulletin 327358, United States Department of Agriculture, Economic Research Service.
    8. Simanti Banerjee & Timothy N. Cason & Frans P. de Vries & Nick Hanley, 2021. "Spatial Coordination and Joint Bidding in Conservation Auctions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(5), pages 1013-1049.

    More about this item

    Keywords

    Ecosystem services; information asymmetry; laboratory experiment; procurement auctions; quality auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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