When the truth hurts: Endangered species policy on private land with imperfect information

Current species conservation policy gives landowners little incentive to cooperate with information collection and may result in little conservation occurring on private land. Modifying the current system by paying compensation to landowners or forcing landowners to provide information before developing, improves equilibrium efficiency. With symmetric but imperfect information about conservation value, combining elements of compensation and information requirements in a regulatory scheme, similar to the current incidental take provisions of the Endangered Species Act, can generate an efficient outcome. When landowners have private information about land value and compensation cannot be based on species conservation value, an efficient outcome cannot be assured. (C) 1998 Academic Press.