A Laboratory Comparison of Uniform and Discriminative Price Auctions for Reducing Non-point Source Pollution

Timothy Cason and Lata Gangadharan ()

Land Economics, 2005, vol. 81, issue 1

Abstract: Auctions allow regulators to identify land management changes with substantial environmental benefit and low opportunity cost. This paper reports an experiment in which seller subjects compete in sealed-offer auctions to obtain part of a fixed budget allocated by the experimenter-regulator to subsidize pollution abatement. One treatment employs uniform-price auction rules, whereas another treatment employs discriminative price auction rules. We find that most offers in the uniform-price auction are within 2% of cost, whereas most offers in the discriminative price auction are at least 8% greater than cost. Nevertheless, the discriminativeprice auction has superior overall market performance.

JEL-codes: C91 Q15 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (61)

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Related works:
Working Paper: A LABORATORY COMPARISON OF UNIFORM AND DISCRIMINATIVE PRICE AUCTIONS FORREDUCING NON-POINT SOURCE POLLUTION (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:81:y:2005:i:1:p51-70

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