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ABSTRACT Incentives are a widely used tool for addressing deforestation and are often implemented as collective contracts. Local institutions are crucial to the solution of collective action problems associated with forest conservation, but we still have little knowledge of how to encourage institutional creation through policy. Since collective contracts do not eliminate freeriding incentives, we argue that their success hinges on their ability to stimulate the creation of institutions for collective action. To test these ideas, we analyze data from an incentivized lab‐in‐the‐field experimental collective action game played with natural resource users in four developing countries. The experiment simulates management of a common forest, and groups were randomly assigned to a conservation incentive payment condition. We observe how much group members attempt to coordinate on the creation of institutional rules and find experimental evidence that an external incentive program can stimulate the endogenous creation of informal institutions.
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Behavioral Biases among Producers: Experimental Evidence of Anchoring in Procurement Auctions
Abstract Experimental research in behavioral economics focuses on consumer behaviors. Similar experimental research on profit-maximizing producers is rare. In three field experiments involving commercial agricultural producers in the US, we detect evidence of anchoring in competitive auctions for conservation contracts related to nutrient and pest management that were worth, on average, nearly nine thousand dollars. In these auctions, the value of the starting cost-share bid was randomized to be either 0% or 100%. When the starting value was 100%, final bids were 46% higher, on average. We find weak evidence that experience with conservation contracts may modestly attenuate the anchoring effect.
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- Award ID(s):
- 1757353
- PAR ID:
- 10420905
- Date Published:
- Journal Name:
- The Review of Economics and Statistics
- ISSN:
- 0034-6535
- Page Range / eLocation ID:
- 1 to 40
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1162/rest_a_01215
