Abstract
Twenty-seven public timber tracts were auctioned in Minnesota where bidders were required to submit two sealed bids for a tract–one with and the other without the use of timber harvesting guidelines. After the auctions, bidders were mailed a questionnaire requesting information about their logging business, the sources of information consulted in developing their bids, and perceptions of how various tract- and sale-specific factors and guidelines influenced their bidding behavior. The majority of responding timber harvesters did not consult any special sources and only one-half visited the tract before submitting their bids. Although bidding behavior was influenced by several factors, a tract's physical characteristics (e.g., volume of merchantable timber) had a greater influence on their bidding behavior than did any guidelines. Of the guidelines evaluated, those that required leaving merchantable trees (e.g., for wildlife or visual purposes) were reported to have the greatest influence on stumpage bids. Sale-specific variables (e.g., timber harvester's need for timber) had only a minimal to moderate influence on bidding behavior. The findings suggest that timber sale design can help mitigate the cost associated with implementing forest management guidelines.North. J. Appl. For. 22(4):275–280.
Empirical Evidence of Overbidding in M&A Contests
