Designing Market Based Instruments: Beyond Round One of the Australian MBI Pilot Program
AbstractMost markets have evolved as buyers and sellers constantly search for ways to create value, however this has not occurred naturally in all areas of the economy markets are missing for some goods, including the environment. In such cases, transaction costs linked to property rights, asymmetric and hidden information and packaging problems have often prevented otherwise valuable deals from being negotiated in relation to the environment. However new capabilities and a better knowledge and understanding of the problems at hand now mean that where the objective is clear, and the knowledge, skills and capability exist to understand, model and measure the relevant characteristics of the problem transaction costs are low enough that economists can, in certain cases, design market based instruments that match demand with supply. In general the findings from the National MBI Pilot Program indicate that cap-and-trade systems, auctions and offsets systems can be effective tools to achieve natural resource management. The type of mechanism that is appropriate in a particular circumstance will depend on the transaction costs involved, which are strongly influenced by the features of the problem at hand. Mechanisms therefore require careful design to ensure they are tailored to each particular case.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25743.
Date of creation: 2006
Date of revision:
Transaction Costs; Property Rights; Asymmetric and Private Information; Public Goods; Government Policy; Marketing;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grether, David M & Isaac, R Mark & Plott, Charles R, 1981.
"The Allocation of Landing Rights by Unanimity among Competitors,"
American Economic Review,
American Economic Association, vol. 71(2), pages 166-71, May.
- Grether, David M. & Isaac, R. Mark & Plott, Charles R., . "The Allocation of Landing Rights by Unanimity among Competitors," Working Papers 350, California Institute of Technology, Division of the Humanities and Social Sciences.
- Brett Bryan & Jeffery Connor et al, 2005., 2005. "Catchment Care - Developing an Auction Process for Biodiversity and Water Quality Gains. Volume 1 - Report," Natural Resource Management Economics 05_004, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
- S.J. Rassenti & V.L. Smith & R.L. Bulfin, 1982. "A Combinatorial Auction Mechanism for Airport Time Slot Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 402-417, Autumn.
- Lawrence M. Ausubel & Paul Milgrom, 2002.
"Ascending Auctions with Package Bidding,"
02004, Stanford University, Department of Economics.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.