13 - The Agglomeration Bonus

Summary

Like Chapter 8, this chapter combines the concepts and approaches of Chapters 9–12 to analyse the aggomeration bonus (AB) introduced in Chapter 11. After an introductory section about the economics of habitat fragmentation, the use of the AB is presented in the context of conservation payments, auctions and conservation offsets, which is followed by a variant of the AB: the aglomeration payment. The following sections discuss the role of side payments among human agents and outline further variants of the AB, such as spatially targeted auctions and the agglomeration malus. A lot of research on the AB is of an experimental nature where subjects are placed in a fictitious decision context and their decisions observed and evaluated statistically. Although the present book is on modelling, these experiments are so relevant to the field of biodiversity economics and ecological-economic modelling that a section is devoted to this literature.