Simple and Approximately Optimal Contracts for Payment for Ecosystem Services

• 成果类型: Article
• 署名作者: Li, Wanyi Dai; Ashlagi, Itai; Lo, Irene
• 署名单位: Stanford University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4273
• 发表日期: 2023
• 页码: 7821-7837
• 关键词: Contract design; payment for ecosystem services; information asymmetry; Additionality; CONDITIONALITY

摘要

Many countries have adopted payment for ecosystem services (PES) programs to reduce deforestation. Empirical evaluations find such programs, which pay forest owners to conserve forest, can lead to anywhere fromno impact to a 50% reduction in deforestation level. To better understand the potential effectiveness of PES contracts, we use a principal-agent model, in which the agent has an observable amount of initial forest land and a privately known baseline conservation level. Commonly used conditional contracts perform well when the environmental value of forest is sufficiently high or sufficiently low, but can do arbitrarily poorly compared with the optimal contract for intermediate values. We identify a linear contract with a distribution-free per-unit price that guarantees at least half of the optimal contract payoff. A numerical study using U.S. land use data supports our findings and illustrateswhen linear or conditional contracts are likely to bemore effective.