Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/24946
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Transaction Costs, Communication and Spatial Coordination in Payment for Ecosystem Services Schemes
Authors: Banerjee, Simanti
Cason, Timothy
de, Vries Frans
Hanley, Nick
Contact Email: f.p.devries@stir.ac.uk
Keywords: Agglomeration Bonus
Payments for Ecosystem Services
Content Analysis
Coordination Games
Lab Experiments
Local Networks
Strategic Uncertainty
Issue Date: May-2017
Citation: Banerjee S, Cason T, de Vries F & Hanley N (2017) Transaction Costs, Communication and Spatial Coordination in Payment for Ecosystem Services Schemes, Journal of Environmental Economics and Management, 83, pp. 68-89.
Abstract: Agricultural producer participation and spatial coordination of land use decisions are key components for enhancing the effective delivery of ecosystem services from private land. However, inducing participation in Payment for Ecosystem Services schemes for coordinating land management choices is challenging from a policy design perspective owing to transaction costs associated with participation. This paper employs a laboratory experiment to investigate the impact of such costs on participation and land use in the context of an Agglomeration Bonus (AB) scheme. The AB creates a coordination game with multiple Nash equilibria related to alternative spatially-coordinated land use patterns. The experiment varies transaction costs between two levels (high and low), which affects the risks and payoffs of coordinating on the different equilibria. Additionally, an option to communicate is implemented between neighboring producers arranged on a local network to facilitate spatial coordination. Results indicate a significant difference in participation and performance under high and low transaction costs, with lower uptake and performance when transaction costs are high. These effects are, however, impacted by transaction costs faced in the past. Communication improves both AB participation rates and performance with the effect being greater for participants facing high transaction costs.
DOI Link: http://dx.doi.org/10.1016/j.jeem.2016.12.005
Rights: This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. Accepted refereed manuscript of: Banerjee S, Cason T, de Vries F & Hanley N (2017) Transaction Costs, Communication and Spatial Coordination in Payment for Ecosystem Services Schemes, Journal of Environmental Economics and Management, 83, pp. 68-89. DOI: 10.1016/j.jeem.2016.12.005 © 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

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