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Citizens' demand for permits and Kwerel's incentive compatible mechanism for pollution control

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Author Info
Daniel English () (University of Richmond)
Andrew Yates () (University of Richmond)

Additional information is available for the following registered author(s):

Abstract

An interesting feature of pollution permit markets is that citizens may purchase permits to directly lower the levels of pollution. Kwerel's mechanism (Review of Economic Studies~1977) is not incentive compatible when citizens demand permits. We show that a modification of Kwerel's mechainism, the minimum-price mechanism, is incentive compatible when citizens demand permits, even in the case where there is uncertainty about the damages from pollution.

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File URL: http://economicsbulletin.vanderbilt.edu/2007/volume17/EB-07Q20001A.pdf
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 17 (2007)
Issue (Month): 4 ()
Pages: 1-9
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:17:y:2007:i:4:p:1-9

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Related research
Keywords: citizens; mechanism; minimum price; Pollution permits;

Find related papers by JEL classification:
Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
D0 - Microeconomics - - General

References listed on IDEAS
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.:

  1. Kwerel, Evan, 1977. "To Tell the Truth: Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Blackwell Publishing, vol. 44(3), pages 595-601, October. [Downloadable!] (restricted)
  2. Conley, John P. & Smith, Stefani C., 2005. "Coasian equilibrium," Journal of Mathematical Economics, Elsevier, vol. 41(6), pages 687-704, September. [Downloadable!] (restricted)
  3. Dasgupta, Partha & Hammond, Peter & Maskin, Eric, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Blackwell Publishing, vol. 47(5), pages 857-60, October. [Downloadable!] (restricted)
  4. Ratna Shrestha, 1998. "Uncertainty and the Choice of Policy Instruments: A Note On Baumol and Oates Propositions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(4), pages 497-505, December. [Downloadable!] (restricted)
  5. Boyd, John III & Conley, John P., 1997. "Fundamental Nonconvexities in Arrovian Markets and a Coasian Solution to the Problem of Externalities," Journal of Economic Theory, Elsevier, vol. 72(2), pages 388-407, February. [Downloadable!] (restricted)
  6. Malueg, David A. & Yates, Andrew J., 2006. "Citizen participation in pollution permit markets," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 205-217, March. [Downloadable!] (restricted)
  7. Lewis, Tracy R. & Sappington, David E. M., 1995. "Using markets to allocate pollution permits and other scarce resource rights under limited information," Journal of Public Economics, Elsevier, vol. 57(3), pages 431-455, July. [Downloadable!] (restricted)
  8. Aparna Guha, 1996. "Internationalizing the Role of Domestic Pollution Permit Market," Eastern Economic Journal, Eastern Economic Association, vol. 22(4), pages 449-456, Fall. [Downloadable!]
  9. Smith, Stefani C. & Yates, Andrew J., 2003. "Optimal pollution permit endowments in markets with endogenous emissions," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 425-445, November. [Downloadable!] (restricted)
Full references

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.)

  1. Kahana, Nava & Mealem, Yosef & Nitzan, Shmuel, 2009. "The Efficient and Fair Approval of "Multiple-Cost - Single-Benefit" Projects under Unilateral Information," IZA Discussion Papers 4181, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Elias Asproudis & Maria José Gil-Moltó, 2009. "Technological choice under environmentalists’ participation in Emissions Trading Systems," Discussion Papers in Economics 09/9, Department of Economics, University of Leicester. [Downloadable!]
  3. repec:mop:credwp:08.03.75 is not listed on IDEAS
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This page was last updated on 2009-11-16.

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