Scoring two-dimensional bids: how cost-effective are agri-environmental auctions?
AbstractThis paper analyses the cost-effectiveness of agri-environmental auctions that solicit two-dimensional bids consisting of conservation activity and compensation payment. Taking a self-selecting contract schedule as a benchmark, an optimally designed auction has the potential to reduce government expenditure significantly. However, the relative cost-effectiveness of a multi-dimensional auction is determined by the bid scoring system and farmers' expectations of the maximum acceptable bid score. The article elaborates conditions for a bid scoring rule that optimises cost-effectiveness and tests how benefits of an auction approach may be eroded if farmers' expectations of the maximum acceptable bid score diverge from the level consistent with this optimum. Oxford University Press and Foundation for the European Review of Agricultural Economics 2008; all rights reserved. For permissions, please email email@example.com, Oxford University Press.
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Bibliographic InfoArticle provided by Foundation for the European Review of Agricultural Economics in its journal European Review of Agricultural Economics.
Volume (Year): 35 (2008)
Issue (Month): 2 (June)
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- Sipilainen, Timo & Huhtala, Anni, 2011.
"Opportunity Costs of Providing Crop Diversity in Organic and Conventional Farming: Would Targeted Environmental Policies Make Economic Sense?,"
2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland
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- Viaggi, Davide & Raggi, Meri & Gallerani, Vittorio, 2010. "Evaluating the potential contribution of contract auctions to Agri-Environmental Policy efficiency: A simulation model for Emilia-Romagna (Italy)," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(2), June.
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