Using Laboratory Experiments for Policy Making: An Example from the Georgia Irrigation Reduction Auction

37 Pages Posted: 30 Mar 2006

See all articles by Ronald C. Cummings

Ronald C. Cummings

Georgia State University - Department of Economics

Charles A. Holt

University of Virginia - Department of Economics

Susan Laury

Georgia State University - Andrew Young School of Policy Studies

Date Written: September 2003

Abstract

In recent years, there has been a growing interest in policy applications of different auction systems. This paper reports on a series of experiments that were used to design and implement an auction in a unique policy-making environment. In April, 2000, the Georgia legislature passed a unique law that mandated the state hold an auction in drought years in order to pay some farmers to suspend irrigation. This paper reports the results of laboratory experiments that were used by state policy-makers to determine the auction institution that would be used to fulfill the requirements of this new law. Experimental results are compared with farmers' bidding behavior in the state-run irrigation auction used to reduce water usage in Georgia.

Keywords: experiment, auction, irrigation

Suggested Citation

Cummings, Ronald G. and Holt, Charles A. and Laury, Susan, Using Laboratory Experiments for Policy Making: An Example from the Georgia Irrigation Reduction Auction (September 2003). Andrew Young School of Policy Studies Research Paper Series No. 06-14, Available at SSRN: https://ssrn.com/abstract=893800 or http://dx.doi.org/10.2139/ssrn.893800

Ronald G. Cummings

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Charles A. Holt

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Rouss Hall #114
Charlottesville, VA 22904-4182
United States
(804) 924-7894 (Phone)

Susan Laury (Contact Author)

Georgia State University - Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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