Reverse Auctions for Purchases of Ecosystem Services: The Effect of Information on Auction Structure Performance
Date
2016-03
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Applied Economics and Statistics, University of Delaware, Newark, DE.
Abstract
Differences between private and public decision-making are quantified using
willingness-to-accept (WTA) data collected in artefactual field experiments.
Participants first makedecisions in a second-price auction (private rounds)
followed by majority-rule voting (public rounds) on the median price collected
in the private rounds. Results suggest that other-regarding behavior in the
public rounds regarding stigma and disgust can significantly reduce WTA. Chatbox
communication can further reduce WTA, and social preferences, education,
and unrelated communication are the primary drivers that lead participants to
accept significantly lower prices for potentially disgusting tasks. The results
have application for sustainable, cost-effective recycled water projects.
Description
Keywords
Reverse auctions, Auction efficiency, Laboratory experiments, Land conservation, Ecosystem service markets
Citation
Duke, J.M., K.D. Messer, L. Lynch, and T. Li. 2016. “Reverse Auctions for Purchases of Ecosystem Services: The Effect of Information on Auction Structure Performance.” Applied Economics & Statistics Research Report, University of Delaware, RR16-05.