communication competition and social gift exchange in an auction for public good provision abstract reverse auctions are an established policy instrument for allocating conservation contracts while the auction mechanism has been the subject of a number of studies less attention has been paid to the post bidding contract phase as contracts involving natural resource management are usually incomplete trust becomes crucial for the effectiveness of the programme we test the effect of communication between auctioneer and bidders on bidding behaviour and contract fulfilment using experimental economics we combine a repeated reverse auction with an effort level game and use a bilateral chatting tool as treatment variable without communication auctioneers tended to select the lowest priced bidders who invested substantially less than the socially optimal level of effort when fulfilling their contract to provide the public good relational contracting proved important with effort levels and profits tending to be higher when auctioneers and bidders entered into consecutive contract relationships in the communication treatment there was no evidence of price competition as auctioneers were more likely to accept high priced bids however an overall higher price level did not lead to efficiency losses since contractors realised higher effort levels in return establishing a social gift exchange our results demonstrate the importance of trust based relationships between the auctioneering institution and landholders

how should we incentivize private landowners to produce more biodiversity globally much biodiversity is found on private land acting to conserve such biodiversity thus requires the design of policies which influence the decision making of farmers and foresters in this paper we outline the economic characteristics of this problem before reviewing a number of policy options such as conservation auctions and conservation easements we then discuss a number of policy design problems such as the need for spatial coordination and the choice between paying for outcomes rather than actions before summarizing what the evidence and theory developed to date tell us about those aspects of biodiversity policy design which need careful attention from policy makers and environmental regulators

the disposition effect and loss aversion do gender differences matter this paper analyzes gender differences in the disposition effect in an experiment based on weber and camerer 1998 the results emphasize that female investors realize less capital losses have significantly higher disposition effects and are more loss averse than men

what to preserve an application of diversity theory to crane conservation this paper attempts to demonstrate how diversity theory can be applied to the analysis of real world conservation policies the specific example chosen to serve as a paradigm concerns preservation priorities among the fifteen species of cranes living wild throughout the world the example is sufficiently actual to show how diversity theory can be used operationally to frame certain critical conservation questions and to guide us toward answers by providing informative quantitative indicators of what to protect at the same time the cranes example is rich enough that it illustrates nicely some broad general principles about the economics of diversity preservation

how can market mechanisms for forest environmental services help the poor preliminary lessons from latin america summary market mechanisms for forest environmental services are a new approach for conservation but there is also an increasing interest in the derived developmental benefits of these mechanisms we first propose a conceptual framework for future research on the livelihood impacts of environmental service markets we then review eight latin american case studies on carbon sequestration and watershed protection market initiatives finding positive local income effects in most cases more land tenure security and socioinstitutional strengthening in some cases but some negative effects also we recommend pro poor policy measures such as reducing smallholders transaction costs and removing inappropriate access restrictions

the changing empirical definition of money some estimates from a model of the demand for money substitutes interest bearing checkable deposits are examined to test whether they should be included in measures of the u s money stock both divisia and traditional simple sum aggregates are constructed on the basis of tests for weak separability in a model of the demand for financial assets using nonparametric demand analysis we find that several groups of assets are compatible with aggregation theory we find empirical support for a narrow measure consisting of the components of current mia in tests based on a st louis equation and in terms of controllability a divisia aggregate performs better than the simple sum mia measure

the disposition effect in farmers selling behavior an experimental investigation the identification of the optimal selling time of stored goods is among the most essential economic decisions on a farm beyond monetary aspects behavioral factors influence farmers selling decisions in financial economics the disposition effect is a commonly observed phenomenon it describes the fact that investors hold losing stocks too long while they sell stocks that gained in value too early in the context of agriculture this behavioral bias has not been analyzed thoroughly yet to close this research gap we conducted an incentivized online experiment with 112 farmers from germany the experimental design was based on a well proven experiment from financial economics and adapted to an agricultural decision context where stored goods must be sold farmers were provided information on the uncertain price developments in addition lotteries were conducted to elicit farmers risk attitude probability weighting and loss aversion results indicate that there is a robust disposition effect in farmers selling behavior furthermore more loss averse farmers exhibited a higher realization of gains

the impacts of collective action and property rights on plant genetic resources summary the loss of agricultural biodiversity can reduce food security increase economic uncertainty and threaten the viability and sustainability of agricultural systems often overlooked in the discussion about genetic erosion is the role that collective action and property rights play in controlling the propagation and use of landrace varieties this paper presents examples from around the world of collective management practices over plant genetic resources and discusses some of the impacts that private property rights legislation could have on the conservation of plant genetic resources reflecting upon recent advances in related research areas the paper concludes with suggestions of directions for future research in this emergent topic

designing payments for environmental services in theory and practice an overview of the issues abstract payments for environmental services pes have attracted increasing interest as a mechanism to translate external non market values of the environment into real financial incentives for local actors to provide environmental services es in this introductory paper we set the stage for the rest of this special issue of ecological economics by reviewing the main issues arising in pes design and implementation and discussing these in the light of environmental economics we start with a discussion of pes definition and scope we proceed to review some of the principal dimensions and design characteristics of pes programs and then analyze how pes compares to alternative policy instruments finally we examine in detail two important aspects of pes programs their effectiveness and their distributional implications pes is not a silver bullet that can be used to address any environmental problem but a tool tailored to address a specific set of problems those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers pes is based on the beneficiary pays rather than the polluter pays principle and as such is attractive in settings where es providers are poor marginalized landholders or powerful groups of actors an important distinction within pes is between user financed pes in which the buyers are the users of the es and government financed pes in which the buyers are others typically the government acting on behalf of es users in practice pes programs differ in the type and scale of es demand the payment source the type of activity paid for the performance measure used as well as the payment mode and amount the effectiveness and efficiency of pes depends crucially on program design

incentive based policy design for pollution control and biodiversity conservation a review this paper provides a succinct review of the main developments in the literature on incentive based policy mechanisms in the contexts of pollution control and biodiversity conservation dating from the early beginnings of the science in the 1960s a focal point in the review is on the design features of these policy mechanisms key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation the paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains

a comparison of nonparametric tests of weak separability for annual and quarterly data on consumption leisure and money among the most fundamental assumptions made in economics are utility maximization and the separability of the arguments in the representative consumer s utility function these assumptions are important for theoretical and empirical applications of economics in this article we present results from nonparametric tests of these assumptions of consumer behavior we find that utility maximization generally obtains with either annual or quarterly per capita data on consumption goods leisure and relatively liquid monetary assets annual data on consumption goods leisure and all monetary assets are consistent with utility maximization there is some evidence in support of using partial adjustment models when estimating quarterly data models of the demand for monetary assets further annual data on consumption goods and leisure and on liquid monetary assets meet the necessary and sufficient conditions for weak separability these results support the notion of a monetary aggregate more broadly based than cu

assessing the performance of conservation auctions an experimental study this work uses controlled laboratory experiments to investigate the budgetary and the economic performance of competitive tenders for allocating conservation contracts to landholders experiments have been replicated in two different countries to check for robustness of results we find that auctions outperform the more traditional fixed price programs only in the one shot setting with repetition the auctions quickly lose their edge the budget constrained auction performs similarly to the target constrained in the one shot setting but appears more robust to repetition our results suggest that previous estimates of conservation auction performance are too optimistic and we propose a method for improving such estimates

thar she blows gender competition and bubbles in experimental asset markets do women and men behave differently in financial asset markets our results from an asset market experiment show a marked gender difference in producing speculative price bubbles mixed markets show intermediate values and a meta analysis of 35 markets from different studies confirms the inverse relationship between the magnitude of price bubbles and the frequency of female traders in the market women s price forecasts also are significantly lower even in the first period implications for financial markets and experimental methodology are discussed jel d14 d81 g01 g11 j16

payments for ecosystem services as commodity fetishism abstract payments for ecosystem services pes economically reward resource managers for the provision of ecosystem services and are thus characterised by i an ecological function subject to trade ii the establishment of a standard unit of exchange iii and supply demand and intermediation flows between those who sell and buy ecosystem services this paper departs from the term commodity fetishism broadly understood as the masking of the social relationships underlying the process of production to illuminate three invisibilities in the commodification of ecosystem services firstly we argue that narrowing down the complexity of ecosystems to a single service has serious technical difficulties and ethical implications on the way we relate to and perceive nature secondly the commodification of ecosystem services denies the multiplicity of values which can be attributed to these services since it requires that a single exchange value is adopted for trading finally we suggest that the process of production exchange and consumption of ecosystem services is characterised by power asymmetries which may contribute to reproducing rather than addressing existing inequalities in the access to natural resources and services

property rights issues involving plant genetic resources implications of ownership for economic efficiency the economic theory of property rights is applied to the issue of the conservation of plant genetic diversity an issue often discussed in terms of benefit sharing in order to demonstrate that the assignment of property rights is important for reasons of efficiency as well as for equity given the existence of transaction costs within an industry the location of a property rights assignment is a crucial factor determining the incentives for efficient levels of investment at various levels of that industry in the context of plant genetic resources this means that property rights that are located at the retail end of the pharmaceutical and plant breeding industries may not have sufficient effect to generate the incentives to supply adequate amounts of plant genetic resources to the research and development sectors at the base of these industries

non parametric tests of consumer behaviour the neoclassical model of consumer behaviour postulates that a consumer s choice behaviour can be described as deriving from utility maximization subject to a budget constraint one is then naturally led to ask what this model implies about observed behaviour this question has been addressed from two quite distinct approaches the first approach originating in the work of slutsky 1915 and antonelli 1886 derives necessary and sufficient conditions involving the derivatives of the demand functions the second approach originating in the work of samuelson 1938 1947 1948 derives algebraic conditions on the demand functions implied by maximizing behaviour

bounding an economic monetary aggregate under nonhomothetic preferences we construct nonparametric bounds on true quantity indexes for the realistic case of nonhomothetic preferences these bounds do not require assumptions about the form of the underlying aggregator function we construct these bounds using monetary assets that meet necessary conditions for the existence of an aggregate we find that a tornqvist index of these monetary assets falls within the nonparametric bounds on true quantity indexes almost all of the time whereas a simple sum of these monetary assets falls outside these bounds more than one third of the time

a laboratory study of auctions for reducing non point source pollution abstract non point source pollution such as nutrient runoff to waterways from agricultural production is an environmental problem that typically involves asymmetric information land use changes to reduce pollution incur opportunity costs that are privately known to landholders but these changes provide environmental benefits that may be more accurately estimated by regulators this paper reports a testbed laboratory experiment in which landholder sellers in sealed offer auctions compete to obtain part of a fixed budget allocated by the regulator to subsidize abatement in one treatment the regulator reveals to landholders the environmental benefits estimated for their projects and in another treatment the regulator conceals the potential projects environmental quality the results show that sellers offers misrepresent their costs more for high quality projects when quality is revealed so total abatement is lower and seller profits are higher when landholders know their projects environmental benefits this suggests that concealing this information may improve regulatory efficiency

evaluating conservation auctions with unknown bidder costs the scottish fishing vessel decommissioning program as an alternative to the more traditional fixed price schemes governments can run auctions to purchase environmental services from private agents governments have so far chosen the discriminatory price dp over the uniform price up format theoretical and experimental studies have concluded that the dp usually performs better than the up in terms of cost effectiveness using field data from two fishing vessel decommissioning auctions in scotland we find ambiguous results regarding relative dp and up performances a novel approach for estimating the underlying bidder costs shows that bid shading and cost heterogeneity can each determine relative auction performance jel q22 q28

wildlife corridor market design an experimental analysis of the impact of project selection criteria and bidding flexibility in this work we used controlled laboratory experiments to investigate the impact of project selection criteria and bidding flexibility on the economic performance of wildlife corridor auctions bidders coordinated their bids to form valid corridors and compete with other valid corridors to be successful we tested the impact of bidding flexibility in terms of a bidders differentiating their offers for different eligible corridors and b bidders submitting a single offer that would automatically be considered for all eligible corridors within the bidding options we compared the performance of the auctions under a net benefit and a benefit cost ratio selection criteria we found that participants conditioned their offers in terms of corridor benefit information as a consequence allowing multiple offers significantly increased payment and rent extraction on the other hand a single offer restriction facilitated a higher proportion of valid agreements and reduced rent extraction and as a result the agency s payment we could not find any significant difference between project selection criteria in terms of payment and rent extraction these results provide important insights for policy makers engaged in conservation market design throughout the world

a uniform price auction for conservation easements in the canadian prairies this paper describes the application of a uniform price auction with a hidden reserve price in a field project aimed at discovering canadian landowners willingness to accept compensation for placing conservation easements on their lands this is the only project of this kind in canada to date and one of the few worldwide the paper discusses the design of the auction describes its implementation and presents its results the bids received in the auction conformed with known factors affecting opportunity costs and willingness to accept the information from this auction was successful in guiding a long term easement procurement program

a non parametric analysis of personal sector decisions on consumption liquid assets and leisure this paper uses the non parametric techniques developed by varian i982 i983 and afriat i967 1973 from the theory of revealed preference see samuelson 1947 to address a number of questions of interest to those who model the determination of consumption liquid assets and leisure hours 1 the primary assumption underlying much work in this area whether it deals with highly aggregated categories such as the consumption of non durables or relatively disaggregated categories such as the consumption of energy products or food is that demand functions for consumer goods are consistent with the hypothesis that they are derived from the maximisation of a well behaved utility function subject to a relevant budget constraint the absence of liquid assets or leisure from such studies involves the implicit assumption of weak separability between consumption goods and these other goods the parametric approach then assumes a particular functional form for either the utility function indirect utility function or cost function and estimates the parameters that best describe the data however as varian i983 points out when it comes to testing hypotheses in such a framework it is always a joint hypothesis comprising both the restrictions and the choice of functional form which is being tested 2 to avoid this problem varian developed the nonparametric revealed preference approach to provide algebraic conditions which are imposed by maximising behaviour on a set of data with a finite number of observations this non parametric approach is exploited here in several ways there have been a number of studies using a parametric approach at a fairly disaggregated level to the determinants of consumers expenditure see for example deaton i974 anderson and blundell i982 and ray i984 for applications using

a laboratory comparison of uniform and discriminative price auctions for reducing non point source pollution 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

payments for agrobiodiversity conservation services for sustained on farm utilization of plant and animal genetic resources abstract this paper discusses the potential application of payment for ecosystem services like schemes to tackle market failures associated with the public good characteristics of agrobiodiversity conservation services so called payments for agrobiodiversity conservation services pacs would increase the private benefits from utilizing local plant and animal genetic resources on farm through voluntary reward mechanisms so as to sustain their on farm conservation theoretical and applied insights about pacs are discussed and attention drawn to some of the challenges to be overcome in implementing pacs in particular these relate to the identification of potential buyers the complex institutional setting in which pacs might operate and the articulation of a meaningful conservation goal based on a safe minimum standard approach the latter is urgently needed so as to ensure that additional agrobiodiversity services are generated relative to a fixed pricing approach pacs schemes that seek to overcome information asymmetries through the use of conservation auctions may be associated with significant efficiency gains however potential trade offs between ecological effectiveness economic efficiency and social equity considerations need to be carefully evaluated

the economic valuation of farm animal genetic resources a survey of available methods abstract genetic erosion of domestic animal diversity has placed 30 of the world s breeds at risk of extinction often as a result of government policy programmes conservation and sustainable development of animal genetic resources angr require a broad focus that includes the many adaptive breeds that survive well in the low external input agriculture typical of developing countries environmental economic valuation methodologies have an important role to play in supporting decisions regarding which breeds should be conserved and how this should be done however angr in general and valuation methods in particular have received very little attention this paper provides a survey of the methods available for the valuation of angr and the steps that must be taken in order to test some of the more promising methodologies in practice

can payments for environmental services help reduce poverty an exploration of the issues and the evidence to date from latin america summary this paper examines the main ways in which payments for environmental services pes might affect poverty pes may reduce poverty mainly by making payments to poor natural resource managers in upper watersheds the extent of the impact depends on how many pes participants are in fact poor on the poors ability to participate and on the amounts paid although pes programs are not designed for poverty reduction there can be important synergies when program design is well thought out and local conditions are favorable possible adverse effects can occur where property rights are insecure or if pes programs encourage less labor intensive practices 2004 elsevier ltd all rights reserved

on crop biodiversity risk exposure and food security in the highlands of ethiopia this paper investigates the effects of crop genetic diversity on farm productivity and production risk in the highlands of ethiopia using a moment based approach the analysis uses a stochastic production function capturing mean variance and skewness effects welfare implications of diversity are evaluated using a certainty equivalent measured as expected income minus a risk premium reflecting the cost of risk we find that the effect of diversity on skewness dominates its effect on variance meaning that diversity reduces the cost of risk the analysis also shows that the beneficial effects of diversity

adoption of modern varieties farmers welfare and crop biodiversity evidence from uganda abstract this paper assesses the impact of modern varieties adoption on farmers welfare and crop biodiversity conserved in situ using nationally representative data collected in 2009 2010 in uganda an endogenous switching regression model estimates the net economic and environmental effects of switching from local landraces to modern species results show that after controlling for market and agro ecological factors the local varieties perform better than modern ones in marginalized and climatic vulnerable areas crop biodiversity shows to play a fundamental role in farmers risk minimizing strategies when the available modern varieties are not adaptable to the local context and not supported by the required level of agro intensification rural development policies should consider the heterogeneity in the adoption returns and support diversity conservation as a national strategic asset for a suitable bioprospecting and a best fitting agricultural system implementation

the optimal level of monetary aggregation in this paper i have three objectives 1 to describe the aggregation theoretic procedure for selecting the optimal monetary aggregates 2 to survey the available empirical evidence for information on the optimal aggregates and 3 to describe the procedures that should be followed to complete a redefinition of the monetary aggregates although all of the federal reserve board s current official aggregates are rejected as targets some newer aggregates are found to be substantially preferable to the official aggregates the board s staff recently completed the official redefinition of its monetary aggregates in a manner largely unrelated to aggregation and index number theory my own research in recent years has sought to remedy that shortcoming except for monetary aggregates most of the data provided by governmental agencies are constructed in accordance with aggregation and index number theory since aggregation theory can be applied to monetary aggregation 1 i constructed new monetary aggregates that are consistent with the economic theory 2 recently the empiri

unraveling the effects of payments for ecosystem services on motivations for collective action this paper addresses the differential impacts on decisions towards collective action in the context of payments for ecosystem services pes where individual and collective rewards are conditional on a minimum collective conservation level being achieved interactions between the different reward types farmers social preferences social ties and communication are identified a field game experiment is conducted with andean farmers in peru and framed around their decisions to conserve agrobiodiversity as an impure public good the main results are that pes schemes could be effective in motivating collective action for agrobiodiversity conservation and that individual rewards are likely to be more effective and less sensitive to social factors than collective rewards the latter might have a positive effect on conservation when they are shared within socially closely related groups or in situations where communication and deliberation about collective action are possible

exploring the links between equity and efficiency in payments for environmental services a conceptual approach this paper addresses the relationship between equity and efficiency in pes schemes from a conceptual point of view emphasis is placed on the role of the institutional setting social perceptions about economic fairness or distributive justice of the payments uncertainty and interactions between agents including power relations we introduce the heuristic concept of the efficiency equity interdependency curve to illustrate potential combinations between equity and efficiency that may be theoretically possible the paper argues that different types of institutional factors determine which equity efficiency combinations may be potentially feasible influence the actual combination that will be achieved on the ground and condition possible changes in that combination due to exogenous factors by stressing the role of institutional aspects in shaping the equity efficiency relationship the paper attempts to go beyond the dominant coasean vision of pes

estimating compensation payments for on farm conservation of agricultural biodiversity in developing countries article i nfo this paper examines the role of direct compensation payments for agrobiodiversity conservation using minor millet landraces in india as an example the cost of farmer participation in a hypothetical payments for agrobiodiversity conservation services pacs scheme is estimated using a stated preference valuation approach significant inter crop and inter varietal differences are observed with respect to consumption values upon which the compensation demanded by farm households is shown to primarily depend drawing on a categorisation of consumption values and farmer preferences the paper points to the importance of si multaneously considering a range of potential interventions in order to conserve a priority portfolio of agrobiodiverse resources in predominantly subsistence based agricultural systems

auctions and bidding a primer maybe the contractor was right to think bid jobs are different but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn t understand the subtleties of competitive bidding the phenomenon experienced by the painting contractor known as the winner s curse is just one of the surprising and puzzling conclusions that have been turned up by modern research into auctions another is the theoretical proposition supported also by some experimental evidence that for example a sealed bid treasury bill auction in which each buyer pays a price equal to the highest rejected bid would yield more revenue to the treasury than the current procedure in which the winning bidder pays the seemingly higher amount equal to his own bid there are also subtle results that demonstrate the equivalence of such apparently different institutions as the standard sealed bid auction in which the auctioneer seller sells the goods to the highest bidder for a price equal to his bid and the dutch auction in which the auctioneer seller begins by asking a high price and gradually lowers the price until

conservation when landowners have bargaining power continuous conservation investments and cost uncertainty spatially heterogeneous costs of securing conservation agreements should be accounted for when prioritizing properties for conservation investment most researchers incorporating conservation costs into analyses have relied on estimates of landowners opportunity costs of accepting a conservation agreement implicitly assumed in such studies is therefore that those who produce biodiversity landowners receive none of the surplus available from trade instead landowners could use their bargaining power to gain profits from conservation investments we employ game theory to determine the surplus landowners could obtain in negotiations over conservation agreements and the consequent effects on conservation outcomes when enrolment decisions are governed by continuous variables e g the proportion of a property to enrol in addition we consider how landowner uncertainty regarding the opportunity costs of other landowners affects these outcomes landowners ability to gain surplus is highly variable and reflects variation in the substitutability of different properties for achieving a specified conservation objective the ability of landowners to obtain profits from conservation agreements results in conservation outcomes that are substantially diminished relative to when landowners accept investment at opportunity costs uncertainty increases landowner profits leading to a greater diminution in conservation benefits

conceptualizing interventions to support on farm genetic resource conservation abstract interest is increasing worldwide in on farm conservation as a component of a strategy to conserve crop genetic resources this may require outside support to small scale farmers in areas of crop diversity this paper argues that crop diversity maintained by farming households results from the interplay between a demand and a supply for this diversity interventions to support on farm conservation can be conceptualized by the way they influence these two factors demand interventions should increase the value of crop diversity for farmers or decrease the farm level opportunity costs of maintaining it while supply interventions should decrease the costs of accessing diversity

the cost effectiveness of conservation payments international donors invest billions of dollars to conserve ecosystems in low income nations the most common investments aim to encourage commercial activities such as ecotourism that indirectly generate ecosystem protection as a joint product we demonstrate that paying for ecosystem protection directly can be far more cost effective although direct payment initiatives have imposing institutional requirements we argue that all conservation initiatives face similar challenges thus conservation practitioners would be well advised to implement the first best direct payment approach rather than a secondbest policy option an empirical example illustrates the spectacular cost savings that can be realized by direct payment initiatives

taking stock a comparative analysis of payments for environmental services programs in developed and developing countries abstract payments for environmental services pes are an innovative approach to conservation that has been applied increasingly often in both developed and developing countries to date however few efforts have been made to systematically compare pes experiences drawing on the wealth of case studies in this special issue we synthesize the information presented according to case characteristics with respect to design costs environmental effectiveness and other outcomes pes programs often differ substantially one from the other some of the differences reflect adaptation of the basic concept to very different ecological socioeconomic or institutional conditions others reflect poor design due either to mistakes or to the need to accommodate political pressures we find significant differences between user financed pes programs in which funding comes from the users of the es being provided and government financed programs in which funding comes from a third party the user financed programs in our sample were better targeted more closely tailored to local conditions and needs had better monitoring and a greater willingness to enforce conditionality and had far fewer confounding side objectives than government financed programs we finish by outlining some perspectives on how both user and government financed pes programs could be made more effective and cost efficient

agri environmental policies for biodiversity when the spatial pattern of the reserve matters the aim of this paper is to compare different environmental policies for cost effective habitat conservation on agricultural lands when the desired spatial pattern of reserves is a random mosaic we use a spatially explicit mathematical programming model which studies the farmers behavior as profit maximizers under technical and administrative constraints facing different policy measures each farmer chooses the land use on each field which determines the landscape at the regional level a spatial pattern index ripley l function is then associated to the obtained landscape indicating on the degree of dispersion of the reserve we compare a subsidy per hectare of reserve with an auction scheme and an agglomeration malus we find that the auction is superior to the uniform subsidy for cost efficiency the agglomeration malus does better than the auction for the spatial pattern but is more costly

nonparametric tests of utility maximization and weak separability for consumption leisure and money some of the most fundamental assumptions of economics are utility maximization and weak separability of the arguments in the represen tative consumer s utility function this paper contains results from nonparametric tests of these assumptions about consumer behavior the authors find that quarterly per capita data on consumption goods le isure and monetary assets are consistent with utility maximization further consumption goods and leisure meet necessary and sufficient conditions for weak separability additionally one grouping of relat ively liquid monetary assets meets the necessary conditions for weak separability they also test and find no evidence of homothetic prefe rences copyright 1987 by mit press

relative and absolute scarcity of nature assessing the roles of economics and ecology for biodiversity conservation abstract our aim in this essay is to identify and analyze some of the difficulties with interdisciplinary integration of economic and ecological contributions to the study of biodiversity loss we develop our analysis from a widely accepted definition of economics which is based on the concept of scarcity taking a closer look at this notion we find that economics actually limits itself to a very particular aspect of scarcity which we denote as relative scarcity we describe in what respect the economic approach towards biodiversity is based on this notion and also reflect on the specific understanding of the relation of humans and nature behind the economic approach we then turn to absolute scarcity as another notion of scarcity and show that this is not within the scope of economics but has been a theme of ecology and ecological economics we describe in which way ecological and ecological economic approaches towards biodiversity are based on the idea of absolute scarcity and also reflect on the specific understanding of the human nature relationship behind this notion of scarcity against this background we discuss the roles of economics and ecology for nature conservation we conclude that the interdisciplinary integration of ecology and economics requires a philosophical underpinning and suggest a framework for further research

are professional traders too slow to realize their losses data on a u s proprietary stock trading team provide evidence of the tendency of traders to hold on to their losers too long and sell their winners too soon that is the disposition effect the group of traders studied earned more than 1 4 million in intraday trading profits but they realized their winning trades at a much faster rate than their losing trades this tendency lowered their profitability when the traders limited their risk exposure by trading in small share sizes in low priced stocks or during periods of low volatility the discrepancy between losing and winning holding times rose an analysis of intraday prices suggests that traders could increase trading profits by holding winners longer and selling losers sooner

modeling competitive bidding a critical essay in analyzing bidding modeling matters this paper is a critical analysis of the models available to aid competitive bidding decision making bidding strategy and auction design in real transactions after an introductory overview this paper describes the contexts in which auctions arise reviews the mainstream theory of single isolated auctions and discusses the important work involved in enrichment of this theory in doing so it indicates results that have been obtained and the sort of changes in analytical approach that are needed to tackle other critical enrichments the paper summarizes briefly what is known about the direct use of models by bidders and auction designers a general theme of this paper is that enriched models are needed to bring bidding theory closer to direct applicability in decision making

reconciling theory and practice an alternative conceptual framework for understanding payments for environmental services article i nfo this article provides an alternative and novel theoretical approach to the conceptualization and analysis of payments for environmental services pes we devote special emphasis to institutional and political economy issues which have been somewhat neglected in the literature on pes we argue that the coasean and pure market approach dominating the conceptualization of pes in the literature cannot be easily generalized and implemented in practice by contrast taking into account complexities related to uncertainty distributional issues social embeddedness and power relations permits acknowledging the variety of contexts and institutional settings in which pes operate the alternative approach presented in this introductory article to the special section may be more appealing to pes practitioners since while avoiding restrictive and prescriptive standpoints it allows some key sources of complexities they usually deal with on the ground to be more easily understood

the disposition effect in securities trading an experimental analysis the disposition effect is the tendency to sell assets that have gained value winners and keep assets that have lost value losers disposition effects can be explained by the two features of prospect theory the idea that people value gains and losses relative to a reference point the initial purchase price of shares and the tendency to seek risk when faced with possible losses and avoid risk when a certain gain is possible our experiments were designed to see if subjects would exhibit disposition effects subjects bought and sold shares in six risky assets asset prices fluctuated in each period contrary to bayesian optimization subjects did tend to sell winners and keep losers when the shares were automatically sold after each period the disposition effect was greatly reduced

to bid or not to bid the role of participation rates in conservation auction outcomes in this article i jointly analyze stated willingness to accept values with revealed auction bids from fishing license buybacks in the chesapeake bay blue crab fishery in order to better understand the link between participation decisions and conservation outcomes in contrast with theoretical expectations i find individuals with the lowest willingness to accept participated in these reverse auctions at lower rates than other eligible individuals all else being equal this suggests that who bids in an auction plays an important role in the success of conservation outcomes these results indicate that market design should expand to consider how and whether the economic incentives underlying auction participation align with desired conservation outcomes both within fisheries and in natural resource management more broadly

group inequalities and the nature and power of collective action case studies from peru summary the paper explores collective action in peru through community level case studies it asks why extreme inequality between groups has persisted for so long and whether a weak propensity to collective action is part of the answer significant evidence of constructive meso level collective action is found but it is restricted by a corrupt self seeking political system the analysis shows how in relatively fragile institutional systems the poor find collective action more difficult and costly while the relatively well endowed with capabilities can manage it better shedding light on why inequality is often long lasting when only modest gains are achieved frustration is to be expected

information and auction performance a laboratory study of conservation auctions for spatially contiguous land management conservation auctions are used by public agencies to procure environmental friendly land uses from private landowners we present the structure of an iterative conservation auction that ranks bids according to a scoring rule intended to procure spatially adjacent conservation land use projects laboratory experiments are conducted to compare the performance of this auction under two information conditions under one condition subjects have knowledge about the spatial goal implemented by the scoring rule and in the other case they don t the results indicate that rent seeking is intensified with more information and increased bidder familiarity with the auction revealing the spatial information on the other hand has no impact on auction efficiency

the economics of a public fund for environmental amenities a study of crp contracts the problem of targeting crp purchases to buy environmental amenities under productivity and environmental heterogeneity is considered gini coefficients and lorenz curves are used to measure the effectiveness of spending under alternative targeting criteria the environmental benefits considered are water erosion wind erosion surface water quality and wildlife habitat the three alternative targeting criteria examined include purchasing land according to i the benefit to cost ratio ii the level of benefits and iii the level of cost results indicate that the degree of variability and correlation determine the extent to which suboptimal targeting achieves a significant portion of available environmental benefits

the composition and construction of monetary aggregates an economic monetary aggregate is composed from a set of monetary goods that are at least weakly separable from other goods in the optimizing agent s utility function we construct such an aggregate using a divisia index number we demonstrate that through the middle of the 1980s forecasts of the inflation rate based on our economic monetary aggregate are superior to forecasts based on the simple sum monetary aggregates m1 or m2

is roger federer more loss averse than serena williams using data from the high stakes 2013 dubai professional tennis tournament we find that compared with a tied score i male players have a higher serve speed and thus exhibit more effort when behind in score and their serve speeds get less sensitive to losses or gains when score difference gets too large and ii female players do not change their serve speed when behind while serving slower when ahead thus male players comply more with prospect theory exhibiting more loss aversion and reflection effect our results are robust to controlling for player fixed effects and characteristics with player random effects

a study on financial opportunity costs of growing local varieties of sorghum in ethiopia implications for on farm conservation policy abstract the increasing interest in on farm conservation is driven by its diverse attractive features its participatory nature and its flexible and dynamic features its capacity to maintain not only crop diversity but the knowledge that evolves with it and the chance it offers to link conservation with utilization and farmers livelihoods to implement this strategy on a sustainable basis policy incentives are crucial this paper argues that opportunity costs farmers face have a role to play to design sound policy incentives taking sorghum as an example opportunity costs have been examined in this paper using data collected from 198 farmers in eastern ethiopia the average opportunity costs suggest the size of the required policy incentives and they are the basis to estimate the national conservation costs for on farm conservation the regression analysis shows that opportunity costs increase with access to output markets and extension output price access to input supply experience in growing improved varieties and the relative importance of the crop on the contrary plot quality input price and oxen ownership are reducing the opportunity costs the paper then concludes outlining the policy implications of the empirical findings to incentive design for on farm conservation

adapting auctions for the provision of ecosystem services at the landscape scale abstract auctions or competitive tenders can overcome information asymmetries to efficiently allocate limited funding for ecosystem services most auctions focus on ecosystem services on individual properties to maximise the total amount provided however for many services it is not just the total quantity but their location in the landscape relative to other sites that matters for example biodiversity conservation may be much more effective if conserved sites are connected adapting auctions to address ecosystem services at the landscape scale requires an auction mechanism which can promote coordination while maintaining competition multi round auctions in which bidding is spread over a number of rounds with information provided between rounds on the location of other bids in the landscape offer an approach to cost effectively deliver landscape scale ecosystem services experimental economic testing shows these auctions deliver the most cost effective environmental outcomes when the number of rounds is unknown in advance which minimises rent seeking behaviour it also shows that a form of bid improvement rule facilitates coordination and reduces rent seeking where the biophysical science is well developed such auctions should be relatively straightforward to implement and participate in and have the potential to provide significantly better outcomes than standard one shot tenders