Are Auctions More Efficient Than Fixed Price Schemes When Bidders Learn?

Atakelty Hailu and Steven Schilizzi
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Steven Schilizzi: School of Agricultural & Resource Economics, The University of Western Australia, 35 Stirling Highway, Crawley WA 6009.

Australian Journal of Management, 2004, vol. 29, issue 2, 147-168

Abstract: Auctions are increasingly being considered as a mechanism for allocating conservation contracts to private landowners. This interest is based on the widely held belief that competitive bidding helps minimize information rents. This study constructs an agent-based model to evaluate the long-term performance of conservation auctions under settings where bidders are allowed to learn from previous outcomes. The results clearly indicate that the efficiency benefits of one-shot auctions are quickly eroded under dynamic settings. Furthermore, the auction mechanism is not found to be superior to fixed payment schemes except when the latter involve the use of high prices.

Keywords: AUCTIONS; GOVERNMENT PROCUREMENT; EFFICIENCY OF PUBLIC SPENDING; BIODIVERSITY CONSERVATION; LEARNING; AGENT-BASED MODELLING (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (46)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:29:y:2004:i:2:p:147-168

DOI: 10.1177/031289620402900201

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