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Social and Behavioral Sciences Commons

Open Access. Powered by Scholars. Published by Universities.®

2009

SelectedWorks

Market Design

Econometrics

Articles 1 - 1 of 1

Full-Text Articles in Social and Behavioral Sciences

Competition-Based Environmental Policy: An Analysis Of Farmland Preservation In Maryland, John K. Horowitz, Lori Lynch, Andrew J. Stocking Nov 2009

Competition-Based Environmental Policy: An Analysis Of Farmland Preservation In Maryland, John K. Horowitz, Lori Lynch, Andrew J. Stocking

Andrew J Stocking

Policy makers have turned to competition-based voluntary-enrollment programs as a cost-effective way to achieve preferred land uses. This paper studies bidder behavior in an innovative auction-based program in which farmers compete to sell and retire the right to develop their land. We derive a reduced-form bidding model that includes private and common values. This model allows us to estimate the role of bidder competition, winner’s curse correction, and the underlying distribution of private values. We estimate that the auction enrolled as many as 3,000 acres (12%) more than a take-it-or-leave-it offer would have enrolled for the same budgetary ...