Does the Varian Mechanism Work?--Emissions Trading as an Example
AbstractThis paper investigates whether Varian's(1994) compensation mechanism can work in a laboratory. The results show that this mechanism does not work as in the theory. We found that the magnitude of penalties crucially affects subjects' behavior.
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Bibliographic InfoArticle provided by College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan in its journal International Journal of Business and Economics.
Volume (Year): 2 (2003)
Issue (Month): 2 (August)
emissions trading; compensation mechanism; experiments;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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.:
- Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
- Hahn, Robert W, 1984.
"Market Power and Transferable Property Rights,"
The Quarterly Journal of Economics,
MIT Press, vol. 99(4), pages 753-65, November.
- Misiolek, Walter S. & Elder, Harold W., 1989. "Exclusionary manipulation of markets for pollution rights," Journal of Environmental Economics and Management, Elsevier, vol. 16(2), pages 156-166, March.
- repec:dgr:uvatin:2012132 is not listed on IDEAS
- repec:dpr:wpaper:0874 is not listed on IDEAS
- Estelle Midler & Charles Figuières & Marc Willinger, 2013. "Choice overload, coordination and inequality: three hurdles to the effectiveness of the compensation mechanism?," Working Papers 13-01, LAMETA, Universtiy of Montpellier, revised Feb 2013.
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