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Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile


  • Alevy, Jonathan E.
  • Cristi, Oscar
  • Melo, Oscar


Field experiments were conducted with farmers in the Limarí 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.

Suggested Citation

  • Alevy, Jonathan E. & Cristi, Oscar & Melo, Oscar, 2010. "Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
  • Handle: RePEc:ags:arerjl:90821

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    References listed on IDEAS

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    Cited by:

    1. Messer, Kent D. & Murphy, James J., 2010. "FOREWORD: Special Issue on Experimental Methods in Environmental, Natural Resource, and Agricultural Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
    2. Jonathan E. Alevy & Julianna Butler & Michael Price, 2016. "Multi-good Demand in Bidder's Choice Auctions: Experimental Evidence from the Lab and the Field," Working Papers 2016-01, University of Alaska Anchorage, Department of Economics.

    More about this item


    water market; field experiment; auction design; Farm Management; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy; Risk and Uncertainty;

    JEL classification:

    • 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, Pricing, and Design - - - Auctions


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