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Can a simple model predict complex bidding behaviour? Repeated multi-unit conservation auctions

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  • Schilizzi, Steven
  • Latacz-Lohmann, Uwe

Abstract

Buying environmental services from private landholders using auction mechanisms often involves repeated multi-unit procurement-type auctions. These can either be target-constrained or budget-constrained. Most of the theoretical literature has focused on the former, whereas government agencies have, for conservation purposes, mainly implemented the latter. This paper examines the predictive power of a simple model previously developed for budget-constrained auctions, in comparison to that of the more standard and more complex target-constrained auction model. Experiments carried out in Germany and Australia lend credibility to the nonstandard and simpler budget-constrained model.

Suggested Citation

  • Schilizzi, Steven & Latacz-Lohmann, Uwe, 2005. "Can a simple model predict complex bidding behaviour? Repeated multi-unit conservation auctions," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137947, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare05:137947
    DOI: 10.22004/ag.econ.137947
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    References listed on IDEAS

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    1. Harris, Milton & Raviv, Artur, 1981. "Allocation Mechanisms and the Design of Auctions," Econometrica, Econometric Society, vol. 49(6), pages 1477-1499, November.
    2. Atakelty Hailu & Steven Schilizzi, 2004. "Are Auctions More Efficient Than Fixed Price Schemes When Bidders Learn?," Australian Journal of Management, Australian School of Business, vol. 29(2), pages 147-168, December.
    3. Hailu, Atakelty & Schilizzi, Steven & Thoyer, Sophie, 2005. "Assessing the performance of auctions for the allocation of conservation contracts: Theoretical and computational approaches," 2005 Annual meeting, July 24-27, Providence, RI 19478, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    5. Cox, James C & Smith, Vernon L & Walker, James M, 1984. "Theory and Behavior of Multiple Unit Discriminative Auctions," Journal of Finance, American Finance Association, vol. 39(4), pages 983-1010, September.
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    Cited by:

    1. Vergamini, Daniele & Viaggi, Davide & Raggi, Meri, 2020. "Evaluating the Potential Contribution of Multi-Attribute Auctions to Achieve Agri-Environmental Targets and Efficient Payment Design," Ecological Economics, Elsevier, vol. 176(C).
    2. Vergamini, Daniele & Viaggi, Davide & Raggi, Meri, 2016. "Agri-environmental measures and farmers’ rent: evaluating the potential contribution of auctions to increase the efficiency of Agri-environmental schemes in Emilia-Romagna (Italy)," 2016 Fifth AIEAA Congress, June 16-17, 2016, Bologna, Italy 242443, Italian Association of Agricultural and Applied Economics (AIEAA).

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