Bringing Biophysical Models into the Economic Laboratory: An Experimental Analysis of Sediment Trading in Australia
Experimental economics has emerged and matured as a formal method for questioning and stress testing economic theory and assumptions concerning individual behavior. More recently, experimental methods have been used successfully in an economic laboratory to test alternative environmental policy options. The data underpinning these experiments is often stylized or hypothetical in nature. Ecologists and experimental economics have much to gain by exploring ways to underpin economic experiments with data generated from biophysical models in terms of external validity and salient features of the issue at hand. The study makes a contribution by demonstrating how underpinning experiments with regionally modeled biophysical data may give insights which would not necessarily arise from stylized data. In this study sediment data generated from an Environmental Management Support System (EMSS), a software model of sediment runoff in catchments was used to populate the player decision space. The study investigated the relative performance of four different instruments (closed first and second price call tenders, cap and trade and command and control regulation) as mechanisms for promoting riparian management and reducing total suspended solids exiting a catchment and, as traditional auction structures, logical choices for exploring the consequences of incorporating modeled biophysical data. The study found unexpected insights into player behavior which may not have been foreseen from stylized data, suggesting that further exploration of integrated biophysical economic experiments is warranted.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
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.:
- Fang, Feng & Easter, K. William, 2003. "Pollution Trading To Offset New Pollutant Loadings -- A Case Study In The Minnesota River Basin," 2003 Annual meeting, July 27-30, Montreal, Canada 22135, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Don Fullerton & Gilbert E. Metcalf, 2002.
"Cap and Trade Policies in the Presence of Monopoly and Distortionary Taxation,"
NBER Working Papers
8901, National Bureau of Economic Research, Inc.
- Fullerton, Don & Metcalf, Gilbert E., 2002. "Cap and trade policies in the presence of monopoly and distortionary taxation," Resource and Energy Economics, Elsevier, vol. 24(4), pages 327-347, November.
- Don Fullerton & Gilbert E. Metcalf, 2000. "Cap and Trade Policies in the Presence of Monopoly and Distortionary Taxation," Discussion Papers Series, Department of Economics, Tufts University 0015, Department of Economics, Tufts University.
- Cason, Timothy N. & Gangadharan, Lata & Duke, Charlotte, 2003.
"Market Power in Tradable Emission Markets: A Laboratory Testbed for Emission Trading in Port Phillip Bay, Victoria,"
2003 Conference (47th), February 12-14, 2003, Fremantle, Australia
57841, Australian Agricultural and Resource Economics Society.
- Cason, Timothy N. & Gangadharan, Lata & Duke, Charlotte, 2003. "Market power in tradable emission markets: a laboratory testbed for emission trading in Port Phillip Bay, Victoria," Ecological Economics, Elsevier, vol. 46(3), pages 469-491, October.
- Smith, Vernon L, et al, 1982. "Competitive Market Institutions: Double Auctions vs. Sealed Bid-Offer Auctions," American Economic Review, American Economic Association, vol. 72(1), pages 58-77, March.
- Bonnie G. Colby, 2000. "Cap-and-Trade Policy Challenges: A Tale of Three Markets," Land Economics, University of Wisconsin Press, vol. 76(4), pages 638-658.
- Liski, Matti, 2001. "Thin versus Thick CO2 Market," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 295-311, May.
- Shortle, James S & Horan, Richard D, 2001. " The Economics of Nonprofit Pollution Control," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 255-89, July.
- Reimund Schwarze & Peter Zapfel, 2000. "Sulfur Allowance Trading and the Regional Clean Air Incentives Market: A Comparative Design Analysis of two Major Cap-and-Trade Permit Programs?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(3), pages 279-298, November.
- Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
- Richard Schmalensee & Paul L. Joskow & A. Denny Ellerman & Juan Pablo Montero & Elizabeth M. Bailey, 1998. "An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 53-68, Summer.
- Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25631. 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.