Reverse auctions for drought‐responsive water buybacks: Evidence from co‐designed lab and field experiments

Protecting endangered aquatic species while sustaining farming communities can require water buyback programs that are both cost‐effective and responsive to the variability and unpredictability of drought conditions. Working in close partnership with The Nature Conservancy and the Georgia Water Planning and Policy Center, we co‐design parallel laboratory experiments and high‐stakes framed field experiments to evaluate alternative reverse auction designs. The framed field experiments involved over $650,000 in real payments to irrigators making decisions about their own fields. Results from this lab‐to‐field experimental framework show that streamflow‐based targeting improves cost‐effectiveness relative to acre‐based targeting, and that flexible contracts linking irrigation suspension to actual streamflow conditions outperform rigid contracts when commitments must be made before drought conditions are known. This study demonstrates how integrated lab and framed field experiments can be embedded within real‐world institutional settings to generate policy‐relevant evidence for agri‐environmental programs.