 Security Bonding in Unconventional Gas Development: Evidence from an Economic ExperimentTiho Ancev and Danielle Merrett Ecological Economics, 2018, vol. 153, issue C, 139-146 Abstract: Recent developments in drilling technology promise significant benefits from extraction of unconventional gas. At the same time, the deployment of this technology creates serious concerns about the negative effects it may have on agriculture and on the environment. This paper applies a behavioural approach to explore possibilities for improved negotiation outcomes between unconventional gas developers and host landowners using economic experiments in the laboratory. The paper specifically focuses on the role that security bond could have in resolving some of the conflicts surrounding unconventional gas development. The empirical findings from the economic experiments show that a security bond deposited by a developer prior to the commencement of the gas extraction can result with improved negotiation outcomes between developers and host landowners. Our findings suggest that the security bond is effective because it mitigates the effects of loss averse behaviour by landowners that do not hold sub-surface extraction rights. Keywords: Natural resource rent; Security bond; Unconventional gas; Ultimatum game (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:153:y:2018:i:c:p:139-146 DOI: 10.1016/j.ecolecon.2018.07.007 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.