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Bidding behavior in environmental contract auctions with incomplete monitoring AgEcon
Romstad, Eirik; Alfnes, Frode.
It is well known from the compliance literature that whenever it costly to monitor agents' compliance to contract terms, compliance is likely to be incomplete. This paper goes one step further by examining the implications of incomplete monitoring on agent's sales offers in auctions for environmental contracts. From a monitoring perspective we show allocation contracts to least cost also produces another gain – that less resources need to be spend on monitoring and enforcement. To get full use of this insight one needs to have auction procedures that provide incentives for truthful revelation of agents' private alternate incomes. Our second result is that the incentives for truthful revelation is lost when monitoring is incomplete unless the expected value...
Tipo: Conference Paper or Presentation Palavras-chave: Environmental contract auctions; Monitoring and compliance; Truthful revelation; Environmental Economics and Policy; Resource /Energy Economics and Policy.
Ano: 2011 URL: http://purl.umn.edu/115985
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