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Thin and lumpy: an experimental investigation of water quality trading

  • Suter, Jordan F.
  • Spraggon, John M.
  • Poe, Gregory L.

Water quality trading schemes in the United States can predominantly be characterized by low trading volumes. In this paper we utilize laboratory economics experiments to explore the extent to which the technology through which pollution abatement is achieved influences market outcomes. Mirroring the majority of water quality trading markets, the sessions utilize small trading groups composed of six participants. To understand the extent to which abatement technology influences trading behavior, the experimental treatments vary the degree of heterogeneity in initial abatement costs and the potential for long-lived investments in cost-reducing abatement technology.

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Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 104023.

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Date of creation: 2011
Date of revision:
Handle: RePEc:ags:aaea11:104023
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  1. Marios Bisilkas & Aurora García-Gallego & Iván Barreda Tarrazona, 2012. "Services as an Alternative Path to Sustainability," Working Papers 2012/07, Economics Department, Universitat Jaume I, Castellón (Spain).
  2. Morone, Andrea & Morone, Piergiuseppe, 2012. "Are small groups expected utility?," MPRA Paper 38198, University Library of Munich, Germany.
  3. Eva Camacho-Cuena & Till Requate & Israel Waichman, 2012. "Investment Incentives Under Emission Trading: An Experimental Study," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 53(2), pages 229-249, October.
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