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Wildlife corridor market design: An experimental analysis of the impact of project selection criteria and bidding flexibility

Citation

Iftekhar, MS and Tisdell, JG, Wildlife corridor market design: An experimental analysis of the impact of project selection criteria and bidding flexibility, Ecological Economics, 104 pp. 50-60. ISSN 1873-6106 (2014) [Refereed Article]

Copyright Statement

Copyright 2014 Elsevier B.V.

DOI: doi:10.1016/j.ecolecon.2014.04.017

Abstract

In this work we used controlled laboratory experiments to investigate the impact of project selection criteria and bidding flexibility on the economic performance of wildlife corridor auctions. Bidders coordinated their bids to form valid corridors and compete with other valid corridors to be successful. We tested the impact of bidding flexibility in terms of (a) bidders differentiating their offers for different eligible corridors and (b) bidders submitting a single offer that would automatically be considered for all eligible corridors.Within the bidding options, we compared the performance of the auctions under a net benefit anda benefit cost ratio selection criteria.We found that participants conditioned their offers in terms of corridor benefit information. As a consequence, allowing multiple offers significantly increased payment and rent extraction. On the other hand, a single offer restriction facilitated a higher proportion of valid agreements and reduced rent extraction and, as a result, the agency's payment. We could not find any significant difference between project selection criteria in terms of payment and rent extraction. These results provide important insights for policy makers engaged in conservation market design throughout the world.

Item Details

Item Type:Refereed Article
Keywords:Competitive bidding, Conservation service payment, Net benefit project selection, Wildlife corridor
Research Division:Economics
Research Group:Applied Economics
Research Field:Experimental Economics
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Microeconomics not elsewhere classified
Author:Tisdell, JG (Professor John Tisdell)
ID Code:91515
Year Published:2014
Web of Science® Times Cited:4
Deposited By:Tasmanian School of Business and Economics
Deposited On:2014-05-21
Last Modified:2017-11-22
Downloads:0

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