25 November 2024Conservation auctions are competitive tenders used to allocate conservation contracts to voluntary farmers. This study evaluates whether a buyer of environmental services should conduct many smallscale auctions or a single large-scale auction to allocate a given number of conservation contracts. To examine the impact of an auction’s scale on its performance, I first establish theoretical predictions using simulations, assuming bidders adopt the equilibrium bidding strategy derived from a reverse auction model where competition is based solely on price. I then validate these predictions through a decontextualized online experiment, with three different treatments, each varying the number of bidders. The scale of the auction varies, with the exogenous number of bidders (N) and the number of units purchased (M, the target) both changing proportionally. I do not study the impact of bidder participation, but rather the impact of the auction scale while maintaining a constant level of competition (N/M ) across treatments. Findings show that cost-effectiveness tends to improve as the scale of the auction increases. However, no significant relationship is found between auction scale and either allocative efficiency or bidders’ rents.