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• We asked experts from 27 universities, USDA, CSIRO, EFI, and INRAE about integrating auctions with PES. • Auctions can increase PES efficiency, reveal private costs, and engage stakeholders, but uptake has been slow. • Challenges include participation, accounting for social context, and environmental uncertainty. • Well-understood, field-tested mechanisms are available; innovative new techniques are on the horizon. Auction theory has made major contributions to overcoming allocation problems involving asymmetric information and common-pool resources, leading to multiple Nobel Prizes and serving as a foundation for multi-billion-dollar markets. Despite evidence that related mechanisms could enhance the performance of payments for ecosystem services (PES), adoption has been sporadic and inconsistent. One possibility is that the relevant peer reviewed literature has low visibility or consensus design elements are not sufficiently accessible to interested experts. To overcome this barrier, we adopt a straightforward approach: we asked the PES auction subfield to describe itself. In collaboration with an expert panel (n = 32) whose affiliations span more than two dozen universities and research bodies across three continents—including top-ranked economists, ecosystem services theorists, and practitioners with experience designing and implementing PES programs with and without auctions—we synthesize a birds-eye view of ecosystem services auctions for an interdisciplinary audience. Through an iterative, mixed-method Delphi consultation, we identify broad consensus about fundamental elements of theory and practice, including what functions auctions tend to perform well, common challenges, and key factors influencing their performance. By selecting topics that panelists appeared to disagree about for further discussion, we also highlight open questions and potential research frontiers. We conclude with a reflection on using the Delphi method to foster exchange between time-constrained experts. [ABSTRACT FROM AUTHOR]

Abstract Feed-in tariffs offer renewable energy developers investor certainty but often at the cost of overly generous subsidisation. Reverse feed-in tariff auctions can overcome this problem but can be adversely affected by non-delivery risks, high auction costs and locational concentration. Between 2012 and 2016, the Australian Capital Territory Government in Australia conducted reverse auctions for the feed-in tariff rights to 640 MW of large-scale solar or wind generating capacity, the first such reverse auction program undertaken in the country. The auctions were used to meet a 100% by 2020 renewable electricity target. The auctions came to be assessed on a number of criteria, including local engagement and economic returns, rather than being narrowly focused on delivery risk and feed-in tariff price. Although the auction's successful projects were relatively concentrated, the auctions were successful in delivering significant local economic benefits as well as decreasing average feed-in tariff prices that declined by 23% for wind and 58% for solar over the period of the auctions driven, in part, by lower internal rates of return and lower interest rates. The delivery of projects and project commitments, and potential locational concentration, are key challenges that other reverse auction users may face. Highlights • Evolution of the reverse auction process in the Australian Capital Territory. • Feed-in tariff reverse auction design options. • Analysis of the outcomes of the first Australian feed-in tariff reverse auction program. • Identification of internal rates of return and debt costs as main drivers of reduced auction wind feed-in tariff prices. • Identification of capital costs and capacity factors as the main drivers of reduced auction solar feed-in tariff prices. [ABSTRACT FROM AUTHOR]

The increasing popularity of private land conservation (PLC) globally has quickly translated into an array of polices and programs aimed at achieving ecological benefits. The growth of PLC is entwined with the rise of neoliberal governance, with private land proving congruous with the promotion of market-based instruments (MBIs) and the reliance on private protected areas for conservation in lieu of government investment in public lands. Despite a growing literature on the implications of neoliberal environmental governance, there remains a need for specific insights into the way that individual landholders and ecologies can co-opt or resist the rationalities of MBIs in the practice of private land conservation. Through semi-structured interviews and property walks with 18 landholders, this research examines the implementation of a reverse-auction tender scheme called ‘EcoTender’ in Victoria, Australia. We uncovered four main tensions between the market logic of the program and conservation practice: 1) some landholders used the payment scheme to increase regulatory protections on their property through covenants/easements; 2) many landholders struggled to conceive of their stewardship practice as contractual labour; 3) landholders were producing novel ecosystems that challenged land management focused at the property parcel scale when EcoTender encouraged a return to historical benchmark ecologies, and; 4) many landholders wanted social collaboration when the program required competition for cost efficiency. Our insights show that PLC must create room for a diverse trajectory of conservation practice in dynamic socio-ecological contexts. This means careful reflection on the validity of assumptions underpinning MBIs, the trade-offs that come with applying market logic to conservation and the long-term implications of these instruments for policy and practice. [ABSTRACT FROM AUTHOR]

Payments for ecosystem services (PES) programs are one prominent strategy to address economic externalities of resource extraction and commodity production, improving both social and ecological outcomes. But do PES and related incentive programs achieve that lofty goal? Along with considerable enthusiasm, PES has faced a wide range of substantial critiques. In this paper, we characterize seven major classes of concerns associated with common PES designs, and use these as inspiration to consider potential avenues for improvements in PES outcomes and uptake. The problems include (1) new externalities, (2) misplacement of rights and responsibilities, (3) crowding out existing motivations, (4) efficiency-equity tradeoffs, (5) monitoring costs, (6) limited applicability, and (7) top-down prescription/alienating agency. As currently practiced, many PES programs are thus of limited benefit and even potentially detrimental to sustainability. From this dire conclusion, we highlight several innovations that might be combined and extended in a novel approach to PES that may address all seven problems. Recognizing that PES necessarily articulate and even normalize values, our proposed approach entails designing these institutions intentionally to articulate rights and responsibilities conducive to sustainability—those we might collectively seek to entrench. Problems remain, and new ones may arise, but the proposed approach may offer a way to reimagine PES as a major social and economic tool for enabling sustainable relationships with nature, conserving and restoring ecosystems and their benefits for people now and in the future. [ABSTRACT FROM AUTHOR]

Government agencies that conduct reverse auctions related to the Payment of Ecosystem Services (PES) traditionally provide a significant amount of public information about past auction results. This information includes not only the amount of money spent by the government but also can include various information about the accepted bids. This research uses induced-value experiments to evaluate the effect of past auction information on seller (landholder) rent seeking. Results suggest that sellers use this public information and learn how to secure higher rents. However, when sellers are given information only about the buyer's (government agency's) budget, they secure lower rents. Results also suggest that relative budget size affects rents and that budget stochastic variability in the presence of market information diminishes the effect. Thus, in the presence of public information and equivalent total outlays, variable budgets are more likely than stationary budgets to achieve auction fiscal efficiency—the measure of whether the auction achieves the greatest PES benefits given its limited budget. Finally, this research finds that auctions with greater heterogeneity in seller opportunity costs are likely to be less fiscally efficient than when the distribution is more homogeneous. [ABSTRACT FROM AUTHOR]

In this paper, we study a dynamic procurement problem for a retailer with fixed setup costs and sales levers (such as pricing, advertising, etc.). The retailer runs a reverse auction with a procurement contract in each period. A number of potential suppliers bid for this contract, and the winner is the supplier with the highest bid and is given the decision right for the quantity produced and delivered. The demand is either realized by selling via Internet auctions and unmet demand is lost, or is a price-sensitive nonnegative random variable and all shortages are backlogged. We show the existence of the retailer’s optimal procurement contract, under which the suppliers’ Bayesian–Nash equilibrium bidding strategy is ( q ( · ) , Q ( · ) ) , similar to the classic ( s, S ) policy for the retailers in dynamic inventory control problems. However, the ( q ( · ) , Q ( · ) ) strategy here is for the suppliers and is realized through the suppliers’ marginal production costs and so consists of two random variables for the retailer. [ABSTRACT FROM AUTHOR]

Abstract: Reverse auctions are an established policy instrument for allocating conservation contracts. While the auction mechanism has been the subject of a number of studies, less attention has been paid to the post-bidding contract phase. As contracts involving natural resource management are usually incomplete, trust becomes crucial for the effectiveness of the programme. We test the effect of communication between auctioneer and bidders on bidding behaviour and contract fulfilment using experimental economics. We combine a repeated reverse auction with an effort-level game and use a bilateral chatting tool as treatment variable. Without communication, auctioneers tended to select the lowest-priced bidders, who invested substantially less than the socially optimal level of effort when fulfilling their contract to provide the public good. Relational contracting proved important, with effort levels and profits tending to be higher when auctioneers and bidders entered into consecutive contract relationships. In the communication treatment there was no evidence of price competition, as auctioneers were more likely to accept high-priced bids. However, an overall higher price level did not lead to efficiency losses, since contractors realised higher effort levels in return, establishing a ‘social gift exchange’. Our results demonstrate the importance of trust-based relationships between the auctioneering institution and landholders. [Copyright &y& Elsevier]

Abstract: Reverse e-auctions are increasingly being used as an alternative business-to-business e-procurement model to exchange products and services among enterprises. Despite their high interest from the academic community, there has been limited empirical study focusing on their post-adoption stage. Based on extant literature dealing with their e-business model and building on emerging concepts in B2B e-commerce, this paper intends to investigate the impact of various factors on suppliers’ level of use of e-reverse auctions by examining their internal and external environment. A relevant conceptual framework is developed and examined on data collected from 60 supplying firms that currently utilize e-reverse auctions. These are analyzed through factor analysis and multiple discriminant analysis. Findings show that firms get influenced to a greater extent by their top management strategic practices and competitors’ business actions. The results also provide interesting insights and useful hints to both researchers and practitioners. [Copyright &y& Elsevier]

Abstract: Because of the popularity of the Internet, e-commerce is used more and more widely around the world. At the same time, the business style of procurement has also changed a lot. Under this circumstance, online reverse auction came into being. Based on the theoretical knowledge and practical status quo, this paper has studied some key issues, such as the applicable conditions and the basic process of multi-attribute reverse auction, especially focused on the mechanism of decision-making in the process of performing multi-attribute reverse auction. Again in this paper, AHP method has been employed to determine the weight of each attribute; moreover, based on the linear programming theory, a multi-attribute reverse auction model has been established. Finally, a calculation example has been conducted to demonstrate the utility and availability of the model. [Copyright &y& Elsevier]

Abstract: This paper studies cloud computing resource allocation mechanism based on reverse auction. Cloud computing is a new paradigm of computing in which resources are provided as a service over the Internet. As resource consumers rely on cloud providers to supply their resource needs, cloud providers will need to consider and meet different resource requirements of each individual consumer (such as QoS). At first, the paper proposes a market model based on reverse auction and presents the bidding process of reverse auction. This paper adopts reverse second price auction mechanism to choose the optimal resource provider for each consumer. We analyze particularly and exactly the second price auction model and give formal definition and analysis of reverse auction mechanism. What''s more, we introduce VCG mechanism and present its property in detail. Finally, related to VCG mechanism, it is strictly proved that reverse second price auction mechanism is a VCG mechanism. [Copyright &y& Elsevier]

Abstract: We consider the problem of splitting an order for goods, , among a set of sellers, each having bounded amounts of the goods, so as to minimize the total cost of the deal. In deal splitting with packages (DSP), the sellers offer packages containing combinations of the goods; in deal splitting with price tables (DST), the buyer can generate such combinations using price tables. Our problems, which often occur in online reverse auctions, generalize covering integer programs with multiplicity constraints (CIP), where we must fill up an -dimensional bin by selecting (with a bounded number of repetitions) from a set of -dimensional items, such that the overall cost is minimized. Thus, both DSP and DST are NP-hard, already for a single good, and hard to approximate for arbitrary number of goods. In this paper we focus on finding efficient approximations for DSP and DST instances where the number of goods is some fixed constant. In particular, we develop polynomial time approximation schemes (PTAS) for several subclasses of instances of practical interest. Our results include a PTAS for CIP in fixed dimension, and a more efficient (combinatorial) scheme for , where the multiplicity constraints are omitted. Our approximation scheme for is based on a non-trivial application of the fast scheme for the fractional covering problem, proposed by Fleischer [L. Fleischer, A fast approximation scheme for fractional covering problems with variable upper bounds, in: Proc. of the 15th ACM-SIAM Symposium on Discrete Algorithm, 2004, pp. 994–1003]. [Copyright &y& Elsevier]

Supply chain relationships are increasingly impacted by the use of the Internet and the adoption of logistics technology. In this paper we report the results of a large-scale field study of a diverse group of buyers and their suppliers who have participated in a unique and recently adopted Internet technology: electronic reverse auctions (e-RAs). We examine the barriers to implementing e-RAs, as well as such consequences as cycle time and productivity. We also investigate the parameters that affect the savings that occur during a specific e-RA event, including lotting strategies and the degree of supplier visibility. [Copyright &y& Elsevier]