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

摘要

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 budgetallocated by the experimenter-regu lator 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 arewithin 2% of cost, whereas most offers in the discriminative price auction are at least 8% greater than cost. Nevertheless, the discriminative-price auction has superior overall market performance.