Herein we examine the theory and practical limits of designing a voluntary incentive scheme to protect endangered species on private land. We consider both an ex-ante scheme, in which a contract to the landholder depends only on what the landholder reports, and an ex-post scheme, in which a contract to the landholder depends on reports from all landowners. Except in special cases, the ex-ante scheme never implements the full information allocation, and can actually set aside too much land. In contrast, expected habitat size under the ex-post scheme is smaller than both the ex-ante and full information allocations.
|Original language||English (US)|
|Number of pages||19|
|Journal||Journal of Environmental Economics and Management|
|State||Published - Mar 2002|
Bibliographical noteFunding Information:
1We are thankful for many helpful suggestions by Jean-Mark Bourgeon, John Tschirhart, the associate editor, and two anonymous referees. Also, we thank seminar participants at the Economic Research Service, USDA; UC Davis, University of Hawaii at Manoa, University of Minnesota, University of Wyoming, and the World Congress. Shogren acknowledges support of the Institute of Environmental and Natural Resources, University of Wyoming. Smith acknowledges support of the Minnesota Agricultural Experiment Station.
Copyright 2017 Elsevier B.V., All rights reserved.
- Asymmetric information
- Endangered species
- Mechanism design