Conservation Tenders: Linking Theory and Experiments for Policy Assessment

23 Pages Posted: 24 Jan 2013

See all articles by Steven Schilizzi

Steven Schilizzi

University of Western Australia

Uwe Latacz‐Lohmann

University of Kiel

Date Written: January 2013

Abstract

Auction theory has mostly focussed on target‐constrained auctions and is less well developed for budget‐constrained tenders, which are the norm in environmental policy. This study assesses a theoretical model developed for budget‐constrained tenders in its capacity to predict tendering performance under information deficiencies typical of field applications. If complemented by laboratory experiments, the model is able to make the correct policy recommendation when comparing the tender to an equivalent fixed‐price scheme, even with poor predictive accuracy. This holds even if the policymaker has only limited information on the model’s key input variables.

Keywords: auctions, conservation, economic experiments, environmental policy, model validation, procurement, tenders

Suggested Citation

Schilizzi, Steven and Latacz‐Lohmann, Uwe, Conservation Tenders: Linking Theory and Experiments for Policy Assessment (January 2013). Australian Journal of Agricultural and Resource Economics, Vol. 57, Issue 1, pp. 15-37, 2013. Available at SSRN: https://ssrn.com/abstract=2206089 or http://dx.doi.org/10.1111/j.1467-8489.2012.00602.x

Steven Schilizzi

University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

Uwe Latacz‐Lohmann

University of Kiel

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

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