@booklet {jack_allocation_2010,
	title = {Allocation in environmental markets: A field experiment with tree planting contracts},
	year = {2010},
	month = {may},
	publisher = {Harvard Environmental Economics Program},
	type = {Discussion Paper},
	address = {Cambridge, Massachusetts, {USA}},
	abstract = {The use of market based instruments in developing countries is rapidly expanding, particularly in environmental policy. Several different market mechanisms theoretically lead to efficient allocation of investments in environmental quality without ex post trading, though their empirical performance in these contexts remains untested. This study provides the first evidence from a developing country field experiment to directly compare alternative allocation mechanisms: a uniform-price, sealed bid procurement auction and a posted o¤er market. The experiment was conducted in Malawi for the allocation of tree planting contracts. Results reveal highly divergent outcomes for the two strategically equivalent mechanisms. The auction set the clearing price for both mechanisms and enrolled the 38 percent of the auction treatment group that bid below the price. In the posted offer treatment group, 99.5 percent of participants accepted the contract at that price. Compliance results show significantly more trees surviving per contract allocated under the auction. Results point to a violation of procedure invariance and show a tradeoff between quantity and quality across the two mechanisms. The auction achieves a better selection of high compliance landholders, but potentially at greater cost than the posted offer market.},
	author = {Jack, B. Kelsey}
}
