A conservation auction is a tender mechanism for allocating project contracts among landholders for undertaking environmental conservation activities. Typically, environmental indices (EIs) are used to combine multiple project benefits into an overall score for selecting successful projects. However, higher flexibility and efficiency can be achieved by allowing bidders to offer different combinations of conservation benefits where projects are evaluated directly in terms of their multiple outcomes. Combinatorial auctions that allow bidders to express their preferences for a combination of projects can be attractive. In this article, we discuss three major features of combinatorial auction designs that would be useful in conservation: submission of multiple projects by individual bidders, consideration of cost complementarities by individual bidders, and flexibility in project evaluation by the auctioneer. Using a stylized simulation experiment, we quantify and demonstrate the benefits of these features for some hypothetical conservation situations.

Item Type:	Refereed Article
Keywords:	auction efficiency, biodiversity conservation, combinatorial auction, conservation auction
Research Division:	Economics
Research Group:	Applied economics
Research Field:	Agricultural economics
Objective Division:	Economic Framework
Objective Group:	Measurement standards and calibration services
Objective Field:	Agricultural and environmental standards and calibrations
UTAS Author:	Iftekhar, MS (Dr Md Sayed Iftekhar)
ID Code:	83654
Year Published:	2012
Web of Science® Times Cited:	2
Deposited By:	Economics and Finance
Deposited On:	2013-03-20
Last Modified:	2015-08-13
Downloads:	0