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Quantifying The Benefits Of Conservation Auctions: Evidence From An Economic Experiment

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  • Latacz-Lohmann, Uwe
  • Schilizzi, Steven

Abstract

Building on available theory, this work uses controlled laboratory experiments to investigate the budgetary and the economic performance of competitive tenders for allocating conservation contracts to landholders. Experiments have been replicated in two different countries to check for robustness of results. We find that auctions outperform the more traditional fixed-price schemes only in the one-shot setting. With repetition, the auctions quickly lose their edge. Our results suggest that previous estimates of conservation auction performance are too optimistic.

Suggested Citation

  • Latacz-Lohmann, Uwe & Schilizzi, Steven, 2007. "Quantifying The Benefits Of Conservation Auctions: Evidence From An Economic Experiment," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7616, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi07:7616
    DOI: 10.22004/ag.econ.7616
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    File URL: https://ageconsearch.umn.edu/record/7616/files/cp07la04.pdf
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    References listed on IDEAS

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    1. Katherine Reichelderfer & William G. Boggess, 1988. "Government Decision Making and Program Performance: The Case of the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(1), pages 1-11.
    2. Atakelty Hailu & Steven Schilizzi, 2004. "Are Auctions More Efficient Than Fixed Price Schemes When Bidders Learn?," Australian Journal of Management, Australian School of Business, vol. 29(2), pages 147-168, December.
    3. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
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    Cited by:

    1. Glebe, Thilo W., 2011. "Tendering conservation contracts: Should information on environmental benefits be disclosed or concealed?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114625, European Association of Agricultural Economists.
    2. Hellerstein, Daniel M., 2017. "The US Conservation Reserve Program: The evolution of an enrollment mechanism," Land Use Policy, Elsevier, vol. 63(C), pages 601-610.
    3. David J. Pannell & Roger Claassen, 2020. "The Roles of Adoption and Behavior Change in Agricultural Policy," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(1), pages 31-41, March.
    4. 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, John Wiley & Sons, vol. 99(3), pages 571-591, April.

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