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An Agent Based Analysis of Combinatorial Bidding for Spatially Targeted Multi-Objective Environmental Programs

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  • Md. Sayed Iftekhar

    (The University of Western Australia (UWA))

  • John G. Tisdell

    (University of Tasmania)

Abstract

Establishing national corridors have been identified as a policy priority for environmental and biodiversity conservation in many parts of the world. We explore the performance of a combinatorial landscape auction design to establish environmental corridors using an agent based simulation model. This modelling technique is highly flexible in modelling decision making processes involving heterogeneous landholders. Such structures allow landholders the opportunity to submit joint bids and, as such, share in the benefits that synergies across the landscape provide. The contribution of the paper is threefold. First, we compare spatial and non-spatial project selection to observe whether it is possible to achieve corridor outcomes with a non-spatially targeted project selection mechanism? We observe that while a corridor project selection mechanism increases the procurement cost, such selection mechanisms are necessary for spatially targeted objectives. Second, we study the effect of allowing agents to form coalitions and submit joint bids. We find evidence that joint bidding substantially increased procurement costs especially when the agency’s target was to secure environmental corridors. Third, we study the combined effect of off-site synergies and joint bidding. We observe that relative benefits from off-site synergy are higher in spatial targeting programs compared to non-corridor targeting programs.

Suggested Citation

  • Md. Sayed Iftekhar & John G. Tisdell, 2016. "An Agent Based Analysis of Combinatorial Bidding for Spatially Targeted Multi-Objective Environmental Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 537-558, August.
    • Handle: RePEc:kap:enreec:v:64:y:2016:i:4:d:10.1007_s10640-015-9882-4
    DOI: 10.1007/s10640-015-9882-4
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    Cited by:

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    2. Drechsler, Martin, 2023. "Improving models of coordination incentives for biodiversity conservation by fitting a multi-agent simulation model to a lab experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    3. Hecker, Lutz Philip & Sturm, Astrid & Querhammer, Lisa & Wätzold, Frank, 2024. "Cost-effectiveness of state-dependent versus state-independent agri-environment schemes for biodiversity conservation," Ecological Economics, Elsevier, vol. 217(C).
    4. Justin Dijk & Erik Ansink & Daan van Soest, 2017. "Buyouts and Agglomeration Bonuses in Wildlife Corridor Auctions," Tinbergen Institute Discussion Papers 17-036/VIII, Tinbergen Institute.
    5. Kuhfuss, Laure & Préget, Raphaële & Thoyer, Sophie & de Vries, Frans P. & Hanley, Nick, 2022. "Enhancing spatial coordination in payment for ecosystem services schemes with non-pecuniary preferences," Ecological Economics, Elsevier, vol. 192(C).
    6. Nguyen, Chi & Latacz-Lohmann, Uwe & Hanley, Nick & Schilizzi, Steven & Iftekhar, Sayed, 2022. "Spatial Coordination Incentives for landscape-scale environmental management: A systematic review," Land Use Policy, Elsevier, vol. 114(C).
    7. Simanti Banerjee & Timothy N. Cason & Frans P. de Vries & Nick Hanley, 2021. "Spatial Coordination and Joint Bidding in Conservation Auctions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(5), pages 1013-1049.
    8. Le Lan & Md Sayed Iftekhar & James Fogarty & Steven Schilizzi, 2021. "Auctions for buying back groundwater for environmental purposes: Which design performs better?," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 931-948, September.
    9. David Evans & Andrew Reeson, 2022. "The Performance of a Repeated Discriminatory Price Auction for Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(4), pages 787-806, April.
    10. Sayed, Iftekhar & John, Tisdell, 2016. "An agent based analysis of the impacts of land use restriction and network structures on participation in conservation reserve programs," Working Papers 250161, University of Western Australia, School of Agricultural and Resource Economics.

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