کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5049938 | 1476386 | 2013 | 9 صفحه PDF | دانلود رایگان |
- The social dimension is important for the effectiveness of markets for ecosystem services.
- We test the effect of communication between buyer and seller in an auction for public good provision.
- Our experimental scenario combines a reverse auction with an effort-level game.
- Without communication the auction resembles a market for lemons with low bids and suboptimal effort.
- Communication leads to a social gift exchange with higher bids, effort and public good provision.
Reverse auctions are an established policy instrument for allocating conservation contracts. While the auction mechanism has been the subject of a number of studies, less attention has been paid to the post-bidding contract phase. As contracts involving natural resource management are usually incomplete, trust becomes crucial for the effectiveness of the programme. We test the effect of communication between auctioneer and bidders on bidding behaviour and contract fulfilment using experimental economics. We combine a repeated reverse auction with an effort-level game and use a bilateral chatting tool as treatment variable. Without communication, auctioneers tended to select the lowest-priced bidders, who invested substantially less than the socially optimal level of effort when fulfilling their contract to provide the public good. Relational contracting proved important, with effort levels and profits tending to be higher when auctioneers and bidders entered into consecutive contract relationships. In the communication treatment there was no evidence of price competition, as auctioneers were more likely to accept high-priced bids. However, an overall higher price level did not lead to efficiency losses, since contractors realised higher effort levels in return, establishing a 'social gift exchange'. Our results demonstrate the importance of trust-based relationships between the auctioneering institution and landholders.
Journal: Ecological Economics - Volume 93, September 2013, Pages 11-19