Translator Disclaimer
1 December 2010 Sequential License Buyback Auctions: An Experimental Analysis
MATTHEW A. FREEMAN
Author Affiliations +
Abstract

Fisheries managers use licenses as a method of capping the size of a fishing industry, but as management goals change and the size of fishery stocks fluctuate, managers may be faced with the decision to buy back licenses. The vast majority of economic literature on license buyback programs focuses on the changes to economic efficiency of the fleet, often citing changes to the composition of fleet size. However, managers have little guidance in deciding how to structure a buyback auction, despite the fact that the auction structure plays a key role in determining which licenses are retired and in the composition of the remaining fleet. With the Texas Park and Wildlife Department's Inshore Shrimp License Buyback Program as a basis for auction design, this research uses three experimental treatments to analyze how individuals respond to various reverse auction structures. In terms of the quickest license expiration, our experiments suggest that fisheries managers should select a binding auction with no sequential quality. However, we find that managers would see higher average bids from fishers in comparison to the two sequential auctions. The results are also relevant to other environmental programs in which environmental services are purchased over time in a sequential reverse auction.

JEL Classification Codes: Q22, Q28, C9

MATTHEW A. FREEMAN "Sequential License Buyback Auctions: An Experimental Analysis," Marine Resource Economics 25(4), 355-372, (1 December 2010). https://doi.org/10.5950/0738-1360-25.4.355
Published: 1 December 2010
JOURNAL ARTICLE
18 PAGES

This article is only available to subscribers.
It is not available for individual sale.
+ SAVE TO MY LIBRARY

SHARE
ARTICLE IMPACT
RIGHTS & PERMISSIONS
Get copyright permission
Back to Top