"This paper uses laboratory evidence from public goods games to examine how in payoff-equivalent situations, decision makers contribute toward private or public goods when they are exposed to different kinds of risks and uncertainties in the provision of these goods. We find that location matters with subjects moving away from the environmental uncertainty in favor of strategic uncertainty when that uncertainty is located on the private good. When the uncertainty relates to the public good, subjects face both kinds of uncertainties on the same good, leading to a significant drop in contributions. An opportunity to reduce uncertainty increases cooperation. "("JEL "C90, D81, H41) Copyright (c) 2008 Western Economic Association International.

Urbanisation results in changes to runoff behaviour which, if not addressed, inevitably degrade receiving waters. To date, most stormwater management has focussed on the streetscape and public open space. Given that much of the catchment imperviousness is located on private land, we developed and tested a novel economic instrument (a uniform price auction) for encouraging allotment-scale stormwater retention. We evaluated bids using an integrated environmental benefit index (EBI), based on the ability of the proposed works to reduce runoff frequency, pollutant loads and to reduce potable water demand. The uniform price auction resulted in 1.4 ha of impervious areas being effectively 'disconnected' from the stormwater system. The EBI provided an objective and transparent method of comparing bids, which varied in the type of works proposed (e.g. rainwater tank, rain-garden), the cost and the resulting environmental benefit. Whilst the pilot auction was a success, the public subsidy of works undertaken was around 85%, meaning that property owners a relatively small private benefit in the works. Future auction rounds will be revised to (i) test an EBI which is more focussed on the protection of streams (assessing changes to runoff frequency, baseflow volumes and water quality) and (ii) provide an auction process which is simpler to understand, and provides greater practical support for landholders who wish to undertake works.

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