Auction Experiments and Simulations of Milk Quota Exchanges
Since 2000 Germany has a fairly unique market mechanism to trade milk quotas between dairy farms. The two major features are: (1) a quasi auctioning system that produces excess demands which are covered by state reserves free of charge and (2) a price band is used to exclude high price bids. For both features an experimental design is developed to study their impact in comparison to a regular seller’s sealed bid double auction. Results show that both treatments lead to significant misallocations. These are due the direct impact of regulations and due to an imperfect adjustment of bidding functions towards them. The major goal of the market design to reduce quota prices is reached, however, at significant trade losses.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.orgEmail:
More information through EDIRC
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.:
- Plott, Charles R., .
"Industrial Organization Theory and Experimental Economics,"
405, California Institute of Technology, Division of the Humanities and Social Sciences.
- Plott, Charles R, 1982. "Industrial Organization Theory and Experimental Economics," Journal of Economic Literature, American Economic Association, vol. 20(4), pages 1485-1527, December.
- McAfee, R. Preston., 1990.
"A Dominant Strategy Double Auction,"
734, California Institute of Technology, Division of the Humanities and Social Sciences.
- Peter Bogetoft & Kurt Nielsen & Henrik Ballebye Olesen, 2003. "The single-bid restriction on milk quota exchanges," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(2), pages 193-215, June.
- Maurice Doyon & Virginie Simard & Kent D. Messer & Lota D. Tamini & Harry M. Kaiser, 2008. "An Experimental Analysis of Modifications to the Centralized Milk Quota Exchange System in Quebec," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 295-312, 09.
- Satterthwaite, Mark A & Williams, Steven R, 1989. "The Rate of Convergence to Efficiency in the Buyer's Bid Double Auction as the Market Becomes Large," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 477-98, October.
- Nautz, D., 1995. "Optimal bidding in multi-unit auctions with many bidders," Economics Letters, Elsevier, vol. 48(3-4), pages 301-306, June.
- Nautz, D. & Wolfstetter, E., 1997. "Bid shading and risk aversion in multi-unit auctions with many bidders," Economics Letters, Elsevier, vol. 56(2), pages 195-200, October.
- Martin Shubik, 1977. "A Theory of Money and Financial Institutions. Part 22. A Price-Quantity Buy-Sell Market with and without Contingent Bids," Cowles Foundation Discussion Papers 455, Cowles Foundation for Research in Economics, Yale University.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea10:61304. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.