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Evaluating The Potential Contribution Of Contract Auctions To Aep'S Efficiency

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  • Gallerani, Vittorio
  • Raggi, Meri
  • Viaggi, Davide

Abstract

Agri-Environmetal Policy (AEP) application raised a wide debate about the determination of payment levels and the efficiency of the economic instruments used. In particular, some aspects support the hypothesis of relevant rents due to an overcompensation of farmers� compliance costs. A policy tool suitable for improving the efficiency of AEP can be the adoption of auctions mechanisms in contract allocation. In theory, in an auction mechanism, the farmers have incentives to reveal their compliance costs, helping to reduce the information rents and increase cost-effectiveness. A crucial problem therefore arises from the uneven distribution of information between landowners and the public administration. Auctions mechanism can be useful in reducing opportunistic behavior that arises due to these information asymmetries. The aim of this work is to simulate the potential contribution of auctions mechanism to the efficiency of Agri-Environmental contracts in Emilia Romagna Region (Italy). The results give some indications about the efficiency of auction mechanism compared to other contract mechanism.

Suggested Citation

  • Gallerani, Vittorio & Raggi, Meri & Viaggi, Davide, 2008. "Evaluating The Potential Contribution Of Contract Auctions To Aep'S Efficiency," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6660, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6660
    DOI: 10.22004/ag.econ.6660
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    References listed on IDEAS

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    1. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    2. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
    3. 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.
    4. 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.
    5. Uwe Latacz‐Lohmann & Carel P. C. M. Van der Hamsvoort, 1998. "Auctions as a Means of Creating a Market for Public Goods from Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 334-345, September.
    6. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
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    Cited by:

    1. Fabio Bartolini & Daniele Vergamini, 2019. "Understanding the Spatial Agglomeration of Participation in Agri-Environmental Schemes: The Case of the Tuscany Region," Sustainability, MDPI, vol. 11(10), pages 1-18, May.
    2. Vergamini, Daniele & Raggi, Meri & Viaggi, Davide, 2013. "Evaluating the potential contribution of spatially differentiated payments to the efficiency of Agri-Environmental Measures: A resource allocation model for Emilia Romagna (Italy)," 2013 Second Congress, June 6-7, 2013, Parma, Italy 150235, Italian Association of Agricultural and Applied Economics (AIEAA).
    3. Vergamini, Daniele & Viaggi, Davide & Raggi, Meri, 2016. "Agri-environmental measures and farmers’ rent: evaluating the potential contribution of auctions to increase the efficiency of Agri-environmental schemes in Emilia-Romagna (Italy)," 2016 Fifth AIEAA Congress, June 16-17, 2016, Bologna, Italy 242443, Italian Association of Agricultural and Applied Economics (AIEAA).
    4. Vergamini, Daniele & White, Benedict & Viaggi, Davide, 2015. "Agri-Environmental Policies design in Europe, USA and Australia: is an auction more cost-effective than a self-selecting contract schedule?," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207357, Italian Association of Agricultural and Applied Economics (AIEAA).

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    Agricultural Finance; Environmental Economics and Policy;

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