A Laboratory Comparison of Uniform and Discriminative Price Auctions for Reducing Non-point Source Pollution
نویسندگان
چکیده
Auctions allow regulators to identify land management changes with substantial environmental benefit and low opportunity cost. This paper reports an experiment in which seller subjects compete in sealed-offer auctions to obtain part of a fixed budget allocated by the experimenter-regulator to subsidize pollution abatement. One treatment employs uniform-price auction rules, whereas another treatment employs discriminative price auction rules. We find that most offers in the uniform-price auction are within 2% of cost, whereas most offers in the discriminative price auction are at least 8% greater than cost. Nevertheless, the discriminativeprice auction has superior overall market performance. (JEL C91, Q15)
منابع مشابه
Market Mechanisms and Incentives: Applications to Environmental Policy PROCEEDINGS SESSION FIVE EXPERIMENTAL METHODS A WORKSHOP SPONSORED BY THE US ENVIRONMENTAL PROTECTION AGENCY’S NATIONAL CENTER FOR ENVIRONMENTAL ECONOMICS
Land use changes to reduce non-point source pollution, such as nutrient runoff to waterways from agricultural production, incur opportunity costs that are privately known to landholders. Auctions may permit the regulator to identify those management changes that have greater environmental benefit and lower opportunity cost. This paper reports a testbed laboratory experiment in which landowner/s...
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