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Choosing Winners and Losers in a Classroom Permit Trading Game

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  • Lisa R. Anderson
  • Sarah L. Stafford

Abstract

This paper presents a classroom game in which students trade pollution permits. By changing the distribution of permits across firms, the game shows students how the allocation of property rights determines the winners and losers in the permit trading system but does not affect the efficiency of the system. This game can be used in a variety of classes, including principles or environmental economics, and can be conducted in a 50-minute class period with follow-up discussion in the next class.

Suggested Citation

  • Lisa R. Anderson & Sarah L. Stafford, 2000. "Choosing Winners and Losers in a Classroom Permit Trading Game," Southern Economic Journal, Southern Economic Association, vol. 67(1), pages 212-219, July.
  • Handle: RePEc:sej:ancoec:v:67:1:y:2000:p:212-219
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    References listed on IDEAS

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    1. R. Andrew Muller & Stuart Mestelman, 1998. "What have we learned from emissions trading experiments?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(4-5), pages 225-238.
    2. Cason, Timothy N & Gangadharan, Lata, 1998. "An Experimental Study of Electronic Bulletin Board Trading for Emission Permits," Journal of Regulatory Economics, Springer, vol. 14(1), pages 55-73, July.
    3. Cason, Timothy N. & Plott, Charles R., 1996. "EPA's New Emissions Trading Mechanism: A Laboratory Evaluation," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 133-160, March.
    4. Nugent, Rachel A, 1997. "Teaching Tools: A Pollution Rights Trading Game," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 679-685, July.
    5. Plott, Charles R, 1983. "Externalities and Corrective Policies in Experimental Markets," Economic Journal, Royal Economic Society, vol. 93(369), pages 106-127, March.
    6. Charles A. Holt, 1996. "Classroom Games: Trading in a Pit Market," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 193-203, Winter.
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    Cited by:

    1. Charles Holt & Erica Myers & Markus Wrake & Dallas Burtraw & Svante Mandell, 2010. "Teaching Opportunity Cost in an Emissions Permit Experiment," International Review of Economic Education, Economics Network, University of Bristol, vol. 9(2), pages 34-42.

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