Buyouts and Agglomeration Bonuses in Wildlife Corridor Auctions

TI 2017-036/VIII, Tinbergen Institute Discussion Paper

29 Pages Posted: 6 Apr 2017

See all articles by Justin Dijk

Justin Dijk

VU University Amsterdam

Erik Ansink

VU University Amsterdam - Department of Spatial Economics

Daan van Soest

Tilburg University - CentER & Department of Economics

Date Written: April 5, 2017

Abstract

We present a general model of bidding behavior in wildlife corridor auctions. Given (i) some spatial configuration of landowners in a landscape, (ii) the landowners’ opportunity costs, and (iii) the value of establishing the corridor, our model predicts individual landowners’ bids, overall participation rates in the auction, as well as the expected net benefits to the conservation agency. We find that market efficiency of the auction increases in the number of potential corridors. We use simulations to compare a benchmark auction with two policy scenarios in a hypothetical landscape. In one scenario, members of a winning corridor receive an agglomeration bonus. In the other scenario, we buy out a pivotal landowner (one that is part of many potential corridors) prior to the auction. Given equal budgets for the agglomeration bonus and the buyout policy, an agglomeration bonus is less efficient than a buyout for conservation agencies facing low budgets, and vice versa. A risk-averse conservation agency is however always better off using a buyout policy.

Keywords: Wildlife corridors, procurement auctions, nature conservation

JEL Classification: D44, D85, H57, Q57

Suggested Citation

Dijk, Justin and Ansink, Erik and van Soest, Daan P., Buyouts and Agglomeration Bonuses in Wildlife Corridor Auctions (April 5, 2017). TI 2017-036/VIII, Tinbergen Institute Discussion Paper . Available at SSRN: https://ssrn.com/abstract=2946850 or http://dx.doi.org/10.2139/ssrn.2946850

Justin Dijk (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Erik Ansink

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Daan P. Van Soest

Tilburg University - CentER & Department of Economics ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 2072 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
26
Abstract Views
213
PlumX Metrics