This paper discusses market power effects in ambient permit markets. We consider a dominant firm in a position to exert market power in several markets. A first conclusion is that the distortion observed on manipulated markets spreads to other markets. We find that the manipulated prices could be lower than their competitive level if the dominant firm acts as a monopolist, and higher if it acts as a monopsonist. We show that the efficient outcome is not reached, except if the number of firms is the same as the number of markets whatever the initial endowment of permits. If not, the efficient outcome can be reached by means of initial endowments.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Find related papers by JEL classification: Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water