NDLI: Conservation Auctions, Collusion and the Endowment Effect

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Conservation Auctions, Collusion and the Endowment Effect

Content Provider	Scilit
Author	Dijk, Justin Ansink, Erik Soest, Daan P. Van
Copyright Year	2018
Description	Journal: SSRN Electronic Journal We contribute to the literature on the optimal design of auction mechanisms for the procurement of nature conservation activities. We use an economic experiment to examine whether the market efficiency of conservation auctions increases or decreases with repetition. Theory predicts that repetition facilitates collusion among sellers in procurement auctions, while behavioral economics suggests that repetition may increase market efficiency because it attenuates the endowment effect - the phenomenon that ownership of a good tends to increase one's valuation of the good. We find that of these two countervailing effects, the latter has the upper hand; average bids decrease monotonically over the consecutive auctions. Since repetition increases market efficiency, conservation contracts can be of shorter duration and procured at a higher frequency than has been suggested before.
Related Links	https://papers.tinbergen.nl/18093.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3287932
ISSN	10914358
e-ISSN	15565068
DOI	10.2139/ssrn.3287932
Journal	SSRN Electronic Journal
Language	English
Publisher	Elsevier BV
Publisher Date	2018-11-19
Access Restriction	Open
Subject Keyword	Journal: SSRN Electronic Journal Agricultural Economics Endowment Effect Nature Conservation
Content Type	Text
Resource Type	Article
Subject	Public Health, Environmental and Occupational Health Psychiatry and Mental Health

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