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Investigating the use of Reverse Auctions for Restorable Wetlands on the Prairies
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- Author / Creator
- Kauffman, Anna
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Prairie potholes are drained for the purposes of agricultural production and land development. However, restoring these drained basins is a hard sell. Three reverse auctions involving restoration identified low uptake of wetland restoration contracts by private landowners. This study explores the phenomenon of low participation in reverse auctions using the aforementioned case studies as test cases. Communication records between auction technicians and eligible participants were used to investigate salient considerations for non-participation. Semi-structured interviews were conducted with participants and non-participants to examine the motivations and barriers that limit landowner participation in wetland restoration programs. Findings suggest that private economic considerations are of pivotal concern. Moreover, trust between landowners and providers of restoration contracts, and the complex nature of understanding what wetlands are makes them a difficult good to auction. Wetland restoration comes at a cost to landowners and the public, so the correct allocation of wetland restoration contracts and funding must be properly understood.
The cost effectiveness of reverse auctions depends on a number of factors that include bidder competition, but also the pricing method. Two commonly used pricing methods in reverse auctions for environmental goods and services are disciminatory and uniform. Discriminatory pricing methods pay each bidder their bid in ascending order, up to the point where the auction budget is fully allocated. Uniform priced methods pay each bidder the same amount, which is usually related to the bid distribution. This thesis compares the uniform and disciminatory pricing methods in three actual reverse auctions for prairie wetland restoration. Results suggest that uniform priced methods generated lower levels of information rent sought by bidders. Thus, in uncovering prices for restoration the uniform approach is superior to the dsicriminatory one.
This study informs the use of reverse auctions for wetland restoration and reveals important considerations surrounding the participation of landowners, as well as appropriate auction design. -
- Graduation date
- Fall 2018
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- Type of Item
- Thesis
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- Degree
- Master of Science
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- License
- Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.