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Market Mechanisms and Valuation of Environmental Public Goods

Abstract : In Chapter 1, we show that imperfect substitutability in the indirect utility function can lead to the disparity either between WTA and WTP - due to the opportunity loss - or between gains and losses, which reflects a net loss. In Chapter 2, we evaluate the impact of three auction mechanisms in the measurement of private willingness-to-pay and willingness-to-accept for a pure public good. Our results show that the endowment effect can be eliminated with repetitions of the BDM mechanism. Yet, on a logarithmic scale, the random nth-price auction yields the highest speed of convergence to welfare indices' equality. In Chapter 3, we introduce a model which shows that bidders bid according to the anchoring-and-adjustment heuristic, contingent on a sequential weighting function, which neither ignores the incentive-compatibility constraints nor rejects the posted prices issued from others' bids. In Chapter 4, we show that when agents are intrinsically impulsed, that is, they mostly provide the public good in order to alleviate their guilt, they tend to free-ride. In contrast, when agents are extrinsically impulsed and compete for social status, their provisions become strategic complements. In the latter case, the aggregate level of the public good increases as the disparity between agents' incomes shrinks.
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Contributor : Arnaud Dragicevic <>
Submitted on : Friday, October 7, 2011 - 8:07:33 AM
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Arnaud Dragicevic. Market Mechanisms and Valuation of Environmental Public Goods. Economics and Finance. Ecole Polytechnique X, 2009. English. ⟨tel-00630027⟩

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