Abstract
Agglomeration bonuses (AB) are payments conditional on the contiguity of landowners' conservation areas. It is widely accepted that, by encouraging landowners to cooperate, ABs promote more cost-effective biodiversity conservation than homogeneous payments. This article challenges this conclusion by studying the impact of different AB designs, which may or may not encourage cooperation. Specifically, we show that differentiating the bonus between internal (within-landholding) and external (between-landholdings) boundaries affects AB costeffectiveness. Using an economic-ecological model and game theory, our simulations on realistic landscapes show that the most cost-effective ABs are those presenting relatively larger internal bonuses. Conversely, ABs with relatively larger external bonuses are less cost-effective, despite fostering cooperation between landowners.