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An Experimental Investigation of the Seller Incentives in the EPA's Emission Trading Auction Author info | Abstract | Publisher info | Download info | Related research | Statistics Cason, Timothy N
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The Clean Air Act requires the EPA to conduct annual auctions of emission allowances. Under the discriminative auction rules, sellers with the lowest asking prices receive the highest bids. This paper studies an inverted version of this auction in which buyers face the same incentives as sellers in the EPA auction. Consistent with theoretical predictions, buyers bid above their valuation, auction outcomes are inefficient, and increasing the number of buyers increases bids. Buyers facing human opponents compete more aggressively than the risk-neutral prediction but bids do not differ systematically from this prediction when buyers face computerized Nash 'robots.' Copyright 1995 by American Economic Association.
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 85 (1995)
Issue (Month): 4 (September)
Pages: 905-22
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Handle: RePEc:aea:aecrev:v:85:y:1995:i:4:p:905-22Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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Keywords: Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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James J. Murphy & John K. Stranlund, 2005.
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Robert Godby, 2002.
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Ishikida, Takashi & Ledyard, John O. & Olson, Mark & Porter, David., 2000.
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Morten G. Søberg, 1998.
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Alessandra Casella, 1999.
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