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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: Agglomeration Bonus in Local Networks: A laboratory examination of spatial coordination failure
Author(s): Banerjee, Simanti
Kwasnica, Anthony M
Shortle, James S
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Citation: Banerjee S, Kwasnica AM & Shortle JS (2011) Agglomeration Bonus in Local Networks: A laboratory examination of spatial coordination failure. Stirling Economics Discussion Paper, 2011-18.
Keywords: Agglomeration Bonus
coordination failure
local networks
JEL Code(s): C72
Issue Date: Nov-2011
Series/Report no.: Stirling Economics Discussion Paper, 2011-18
Abstract: The Agglomeration Bonus (AB) – a subsidy mechanism can incentivize neighboring landowners to spatially coordinate their land use decisions for effective provision of ecosystem services such as biodiversity protection. In this paper we explore individual AB performance on a local network in a laboratory setting. In our experiments, we vary the local network size while keeping the number of neighbors for each player same. Results suggest better AB performance and greater spatial coordination in smaller groups relative to bigger ones. In bigger groups however we observe localized areas of coordinated land use choices which indicate partial AB effectiveness.
Type: Working or Discussion Paper
Affiliation: Economics
Penn State University
Penn State University

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