Thesis: Can insurance mechanisms enhance the attractiveness of conservation auctions?
Conservation auctions or tenders (CTs) are multi-unit and multi-winner schemes which belong to the category of reverse auctions. CTs are used to allocate contracts to private landholders to undertake activities to protect or improve biodiversity or environmental services. CTs are gaining popularity globally due to their ability to promote competition among bidders thus influencing them to bid closer to their true costs. However, the existence of various types of risks in procuring environmental goods can undermine the attractiveness of CTs as a conservation policy instrument. Therefore, understanding the link between the risks and bidders participation will help in formulating economically efficient conservation policies. This study provides new insight into mitigating risks in conservation auctions by incorporating some insurance mechanism.
Why my research is important
To date, there are few studies that have investigated the association between uncertainties (e.g. costs, outcome) and auction participation. A better understanding of how these risks impact auction performance is fundamental for effective policy formulation of conservation contracts. By integrating risk mitigation tools (e.g. some insurance mechanism) this research can contribute to the development of more sustainable and efficient auction design.