Journal
AUSTRALIAN JOURNAL OF AGRICULTURAL AND RESOURCE ECONOMICS
Volume 57, Issue 2, Pages 253-272Publisher
WILEY-BLACKWELL
DOI: 10.1111/j.1467-8489.2012.00615.x
Keywords
adverse selection; biodiversity; contract theory; moral hazard; procurement
Categories
Ask authors/readers for more resources
Policy-based markets for environmental services include government procurement, private procurement to satisfy regulatory requirements and private procurement through government offset markets. These markets are increasingly popular and raise questions about optimal procurement under different regulatory frameworks. The design of these schemes draws together issues in auction design and contract theory. Using a mixed adverse selection, moral hazard model, we show that optimal contract design may differ significantly between procurement and regulatory policy environments. We model risk averse landholders to preserve a key feature of the policy environment. These findings have implications for the design of pollution reduction schemes and the rehabilitation of environmental assets.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available