Conference Agenda

This paper introduces and then evaluates a new design of a conservation auction – a rebate auction. This modification aims to incorporate auction context within the decision setting making the environment more realistic and, in the process, examine the extent to which this new feature influences (possibly lowers) rent seeking tendencies. To encourage bidders to bid closer to their true opportunity costs, all unspent funds from the auction budget are returned to all bidders – successful or not – at the end of a discriminating-price auction, with each player receiving the same rebated amount. Higher rebate payments are available, the lower the bids submitted and selected in the auction. Moreover, we pre-multiply left over funds by an investment factor, which increases the incentive for all players to moderate their rent seeking tendencies. We also test whether a priming exercise which rewards collective behavior has an impact on the performance of this Rebate Auction mechanism. Results show that (i) the rebate auction delivers an improvement in environmental performance and in the number of winning bids compared to a no-rebate format (ii) and that priming with group identity seems to worsen auction performance on a number of criteria.