Forest invasive plants can cause market (MES) and non-market ecosystem service
(NMES) losses to private forest landowners. Because bio-invasions create spatial-dynamic
ecological-economic linkages among landowners, bio-invasion control is a weaker-link public
good and is likely to be underprovided. We hypothesize that heterogeneity in forest landowner
preferences is a major determinant of bio-invasion spatial externalities. To test this hypothesis,
we develop a spatial-dynamic model of bio-invasion and control with two agents that value
differently the MES and NMES produced by their forestlands. The bio-invasion spreads within
and across lands according to short, and long-distance dispersal mechanisms and landowners
make control decisions that ignore the impacts on their neighbors. In the absence of long
distance dispersal, they both control the bio-invasion regardless of their preferences. In the
presence of long-distance dispersal and the case of heterogeneous preferences, a central planner
controls the bio-invasion. In the case of decentralized management, however, the MES
landowner implements bio-invasion control, but the NMES landowner does not, causing a
reduction in the aggregate payoffs, compared to the centralized management case. We compare
uniform and non-uniform payments for ecosystem services (PES) and find that a PES to the
NMES landowner only is enough to mitigate the externality whereas a non-uniform PES is
costlier and leads to a non-additional participation of the MES landowner.
