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Imperfect competition, sequential auctions, and emissions trading: An experimental evaluation

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Abstract

This paper reports an experiment that studies the behavior of a monopolist on sequential auction markets for tradable permits. Using six sessions in a triple ABA crossover design, we investigate the cost-effectiveness of permit allocations and the division of trade gains on sequential bid, offer, and double auction markets. The main result is that cost-effectiveness and supra-competitive profits accrued by the monopolist are observed on all the three auction markets.

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  • Morten Søberg, 2000. "Imperfect competition, sequential auctions, and emissions trading: An experimental evaluation," Discussion Papers 280, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:280
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    Cited by:

    1. Cason, Timothy N. & Gangadharan, Lata & Duke, Charlotte, 2003. "Market power in tradable emission markets: a laboratory testbed for emission trading in Port Phillip Bay, Victoria," Ecological Economics, Elsevier, vol. 46(3), pages 469-491, October.
    2. Yujian Yang & Ziyan Li & Bicheng Shao & Guoqin Bu, 2020. "Comparative Analysis of Emission Trading Institution: Based on Experimental Economics Method," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 9(2), pages 1-47, March.

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    More about this item

    Keywords

    Market power; tradable permits; and experimental economics.;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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