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Asymmetric Information and International Tradable Quota Treaties. An experimental evaluation

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Abstract

This paper reports an experimental test of international quota trading on a market characterised by several dominant traders. Asymmetric information regarding quota demand and supply imply true market-clearing prices which differ from an expected competitive quota price. However, in the experiment the expected price level emerges as a focal point on which the bulk of quota trade contracts are keyed. Thus, incomplete price discovery obtains.

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  • Morten Søberg, 1999. "Asymmetric Information and International Tradable Quota Treaties. An experimental evaluation," Discussion Papers 248, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:248
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    1. Jamison, Julian C. & Plott, Charles R., 1997. "Costly offers and the equilibration properties of the multiple unit double auction under conditions of unpredictable shifts of demand and supply," Journal of Economic Behavior & Organization, Elsevier, vol. 32(4), pages 591-612, April.
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    3. Scott Barret, 1998. "On the Theory and Diplomacy of Environmental Treaty-Making," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 317-333, April.
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    More about this item

    Keywords

    Asymmetric information; tradable quotas; experimental Economics.;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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