IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Incentive Contracts for Natura 2000 Implementation: A Mixed Model of Adverse Selection and Moral Hazard

  • Signe Anthon
  • Serge Garcia

    ()

    (Laboratoire d'Economie Forestière, INRA - AgroParisTech)

  • Anne Stenger

    ()

    (Laboratoire d'Economie Forestière, INRA - AgroParisTech)

The implementation of nature conservation policy in the EU is often based on contracts between public authorities and landowners. We model these contracts in the presence of adverse selection and moral hazard when the outcome is uncertain. The results show that agents, who have high probability to reach a higher level of conservation, should be offered a contract where transfers depend on the final outcome with a bonus for a high state. When conservation measures are correlated with forest management, we show that the contractual measures involve distorded tranfers. Finally, we analyze the payment mechanisms used in France and Denmark and show that these mechanisms result in overcompensation and underperformance since they do not take the problem of moral hazard and natural variability into account.

If 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.

File URL: https://www.nancy.inra.fr/lef/content/download/2914/28879/version/1/file/doc_LEF_n06.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (https://www.nancy.inra.fr/lef/content/download/2914/28879/version/1/file/doc_LEF_n06.pdf [302 Found]--> http://www.nancy.inra.fr/lef/content/download/2914/28879/version/1/file/doc_LEF_n06.pdf [301 Moved Permanently]--> http://www6.nancy.inra.fr/lef/content/download/2914/28879/version/1/file/doc_LEF_n06.pdf). If this is indeed the case, please notify (Benoit Vandenbroucke)


File Function: First version, 2006
Download Restriction: no

Paper provided by Laboratoire d'Economie Forestiere, AgroParisTech-INRA in its series Working Papers - Cahiers du LEF with number 2006-06.

as
in new window

Length: 37 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:lef:wpaper:2006-06
Contact details of provider: Postal: 14 rue Girardet, 54042 Nancy cedex
Phone: 33 (0)3 83 39 68 66
Fax: 33 (0)3 83 37 06 45
Web page: http://www.nancy.inra.fr/lef
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Boyer, Marcel & Laffont, Jean-Jacques, 1994. "Environmental Risks and Bank Liability," IDEI Working Papers 45, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Russell, Noel P, 1993. "Efficiency of Rural Conservation and Supply Control Policies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(3), pages 315-26.
  3. Laffont, Jean-Jacques, 1995. "Regulation, moral hazard and insurance of environmental risks," Journal of Public Economics, Elsevier, vol. 58(3), pages 319-336, November.
  4. Hiriart, Yolande & Martimort, David, 2004. "Environmental Risk Regulation and Liability under Adverse Selection and Moral Hazard," IDEI Working Papers 256, Institut d'Économie Industrielle (IDEI), Toulouse.
  5. Theilen, Bernd, 2003. "Simultaneous moral hazard and adverse selection with risk averse agents," Economics Letters, Elsevier, vol. 79(2), pages 283-289, May.
  6. Ing-Marie Gren, 2004. "Uniform or discriminating payments for environmental production on arable land under asymmetric information," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(1), pages 61-76, March.
  7. 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.
  8. Guesnerie, Roger & Picard, Pierre & Rey, Patrick, 1989. "Adverse selection and moral hazard with risk neutral agents," European Economic Review, Elsevier, vol. 33(4), pages 807-823, April.
  9. Moyle, Brendan, 1998. "Species conservation and the principal-agent problem," Ecological Economics, Elsevier, vol. 26(3), pages 313-320, September.
  10. Philippe Bontems & Alban Thomas, 2006. "Regulating Nitrogen Pollution with Risk Averse Farmers under Hidden Information and Moral Hazard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 57-72.
  11. Kline, Jeffrey D. & Alig, Ralph J. & Johnson, Rebecca L., 2000. "Forest owner incentives to protect riparian habitat," Ecological Economics, Elsevier, vol. 33(1), pages 29-43, April.
  12. Huennemeyer, Anne-Juliane & Rollins, Kimberly S., 2001. "Private Resource Management And Public Trust: Optimal Resource Conservation Contracts Under Asymmetric Information," Working Papers 34141, University of Guelph, Department of Food, Agricultural and Resource Economics.
  13. Slangen, Louis H G, 1997. "How to Organise Nature Production by Farmers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(3-4), pages 508-29.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:lef:wpaper:2006-06. 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: (Benoit Vandenbroucke)

The email address of this maintainer does not seem to be valid anymore. Please ask Benoit Vandenbroucke to update the entry or send us the correct address

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.