IDEAS home Printed from https://ideas.repec.org/p/ecl/wisagr/479.html
   My bibliography  Save this paper

Endogenous Information Structures in Conservation Contracting

Author

Listed:
  • Goeschl, Timo

    (U of Wisconsin)

  • Lin, Tun

    (U of Cambridge)

Abstract

Landowners are commonly not only better informed about their private cost of conservation than conservation agencies, but also frequently in a position to spend resources on improving their knowledge about contract-relevant parameters before signing a contract on offer. We extend and generalize the literature on conservation contracting by endogenizing the information structure in a setting where the conservation agency is both asymmetrically informed about the efficiency of the landowner and unable to observe whether the landowner collects information after being offered the contract and before signing it. In this setting, we study the optimal contract the conservation agency should offer to the landowner conditional on the cost of information collection. This contract needs to balance moral hazard and adverse selection problems since by encouraging a landowner to collect information, the conservation agency simultaneously increases the landowner's incentive to misreport his 'type'. We term this the 'information rent effect'. Due to its presence, the terms of conservation contracts have to be significantly altered relative to a contract offered based on exogenous information structure or a contract based purely on information collection.

Suggested Citation

  • Goeschl, Timo & Lin, Tun, 2004. "Endogenous Information Structures in Conservation Contracting," Staff Paper Series 479, University of Wisconsin, Agricultural and Applied Economics.
  • Handle: RePEc:ecl:wisagr:479
    as

    Download full text from publisher

    File URL: http://www.aae.wisc.edu/pubs/sps/pdf/stpap479.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Andrew Moxey & Ben White & Adam Ozanne, 1999. "Efficient Contract Design for Agri-Environment Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 187-202.
    2. Cremer, Jacques & Khalil, Fahad & Rochet, Jean-Charles, 1998. "Strategic Information Gathering before a Contract Is Offered," Journal of Economic Theory, Elsevier, vol. 81(1), pages 163-200, July.
    3. Smith, Rodney B. W. & Shogren, Jason F., 2002. "Voluntary Incentive Design for Endangered Species Protection," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 169-187, March.
    4. Cremer, Jacques & Khalil, Fahad & Rochet, Jean-Charles, 1998. "Contracts and Productive Information Gathering," Games and Economic Behavior, Elsevier, vol. 25(2), pages 174-193, November.
    5. Cremer, Jacques & Khalil, Fahad, 1992. "Gathering Information before Signing a Contract," American Economic Review, American Economic Association, vol. 82(3), pages 566-578, June.
    6. Lewis, Tracy R & Sappington, David E M, 1997. "Information Management in Incentive Problems," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 796-821, August.
    7. Polasky, Stephen & Doremus, Holly, 1998. "When the Truth Hurts: Endangered Species Policy on Private Land with Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 35(1), pages 22-47, January.
    8. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luca Di Corato, 2006. "Mechanism Design for Biodiversity Conservation in Developing Countries," "Marco Fanno" Working Papers 0034, Dipartimento di Scienze Economiche "Marco Fanno".

    More about this item

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:wisagr:479. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/dauwius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.