IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-07q20001.html
   My bibliography  Save this article

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

Author

Listed:
  • Andrew Yates

    () (University of Richmond)

  • Daniel English

    () (University of Richmond)

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.

Suggested Citation

  • Andrew Yates & Daniel English, 2007. "Citizens' demand for permits and Kwerel''s incentive compatible mechanism for pollution control," Economics Bulletin, AccessEcon, vol. 17(4), pages 1-9.
  • Handle: RePEc:ebl:ecbull:eb-07q20001
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2007/Volume17/EB-07Q20001A.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Conley, John P. & Smith, Stefani C., 2005. "Coasian equilibrium," Journal of Mathematical Economics, Elsevier, vol. 41(6), pages 687-704, September.
    2. Ratna Shrestha, 1998. "Uncertainty and the Choice of Policy Instruments: A Note On Baumol and Oates Propositions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 497-505, December.
    3. 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.
    4. Evan Kwerel, 1977. "To Tell the Truth: Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 595-601.
    5. 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.
    6. 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.
    7. Partha Dasgupta & Peter Hammond & Eric Maskin, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Oxford University Press, vol. 47(5), pages 857-860.
    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.
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nava Kahana & Yosef Mealem & Shmuel Nitzan, 2009. "The Efficient and Fair Approval of "Multiple-Cost-Single-Benefit" Projects under Unilateral Information," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(6), pages 947-960, December.
    2. Asproudis, Elias & Weyman-Jones, Tom, 2011. "Third parties �participation in tradable permits market. Do we need them?," MPRA Paper 28766, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • D0 - Microeconomics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-07q20001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.