RT Journal Article
SR Electronic
T1 Evaluating Conservation Auctions with Unknown Bidder Costs: The Scottish Fishing Vessel Decommissioning Program
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 658
OP 673
DO 10.3368/le.88.4.658
VO 88
IS 4
A1 Schilizzi, Steven
A1 Latacz-Lohmann, Uwe
YR 2012
UL http://le.uwpress.org/content/88/4/658.abstract
AB As an alternative to the more traditional fixed-price schemes, governments can run auctions to purchase environmental services from private agents. Governments have so far chosen the discriminatory price (DP) over the uniform price (UP) format. Theoretical and experimental studies have concluded that the DP usually performs better than the UP in terms of cost-effectiveness. Using field data from two fishing vessel decommissioning auctions in Scotland, we find ambiguous results regarding relative DP and UP performances. A novel approach for estimating the underlying bidder costs shows that bid shading and cost heterogeneity can each determine relative auction performance. (JEL Q22, Q28)