Group decision-making theory and behavior under performance-based water quality payments |
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Authors: | Alan R Collins Peter Maille |
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Institution: | a Agricultural and Resource Economics Program, P.O. Box 6108, West Virginia University, Morgantown, WV 26506, United Statesb Philosophy, Politics, and Economics Program, One University Blvd., Eastern Oregon University, La Grande, OR 97850, United States |
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Abstract: | Two theoretical models explaining group allocation decisions under watershed level, performance-based payments are explored: (I) reward and penalize individual contributors; and (II) reduce the problem with cost-sharing and cooperative abatement. Under Model I, an optimal amount of pollution from individual contributors can be achieved with proper payment incentive and group allocation formula. Model II represents a cost effective solution to pollution reduction where the group optimizes its return from group payments, but does not necessarily achieve an optimal level of pollution. Field experiment observations support farmer behavior closer to Model II. |
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Keywords: | Field experiment Non-point pollution Nitrates Watershed Cooperative abatement |
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