Rommel, Jens
- Department of Economics, Swedish University of Agricultural Sciences
Abstract
Linking payments from agri-environment schemes to ecological results or to collective outcomes is viewed as a promising way toincrease the effectiveness of agri-environmental conservation. However, the two approaches are rarely combined. In this study,we test the performance of result-based payments with collective contracts in a contextualised economic experiment with 540non-agricultural and agricultural students in Germany. Combining result-based payments with collective contracts may holdpotential by allowing farmers to share the risks associated with result-based payments within a group. A downside of collectivecontracts, however, is the creation of a social dilemma, as individual payments depend on group outcomes. We find no evidenceof differences in conservation levels under result-based payments with collective as compared to individual contracts, suggestingthat risk-sharing benefits and effects of the social dilemma offset each other. We further examine the performance of collec-tive contracts for varying risk levels that could, for example, reflect different geological and climatic conditions across Europe.Result-based payments with collective contracts motivate higher conservation efforts in our experiment when external risks arehigh. Further, high risks appear to foster group cooperation under collective contracts, potentially leading to more equitable andpredictable outcomes.
Keywords
collective action; common agricultural policy; experimental economics; Germany; payments for ecosystem services; public goods game
Published in
Journal of Agricultural Economics
2026
SLU Authors
UKÄ Subject classification
Economics
Publication identifier
- DOI: https://doi.org/10.1111/1477-9552.70034
Permanent link to this page (URI)
https://res.slu.se/id/publ/146885