Developing incentives for private management efforts for preventing and controlling infectious diseases is a difficult challenge due to its public good nature. Furthermore, since budgets are limited, and the outcomes of prevention efforts are uncertain, resource managers tend to allocate funds to the most immediate and visible problems, often prioritizing post-incursion actions However, there is increasing evidence that focusing on prevention, including early detention and rapid action, is the most cost-effective approach to mitigating the impacts of invasive species. In this paper, we focus on cost-sharing agreements as one of the instruments available for invasive species management, which corrects for the coordination of private biosecurity efforts and encourages early action. We develop a theoretical contract theory framework to understand whether government funds can spread the risk across signatory private agents, and whether agents have incentives to cooperate in biosecurity actions with each other if the compensation mechanism depends not only in one’s actions but on everyone else’s efforts. We find that when the responsibility of biosecurity actions is shared across private agents, funding from the public sector can be used to encourage cooperation, higher private investments in biosecurity, and private agents face lower risk.
|Publication status||Unpublished - 2015|
|Event||BIOECON XVII Conference on Experimental Behavioural Economics and the Conservation of Biodiversity and Ecosystem Services - University of Cambridge, Cambridge, United Kingdom|
Duration: 13 Sep 2015 → 15 Sep 2015
|Conference||BIOECON XVII Conference on Experimental Behavioural Economics and the Conservation of Biodiversity and Ecosystem Services|
|Period||13/09/15 → 15/09/15|