Can auctions control market power in emissions trading markets

Andrew Muller, Stuart Mestelman, John Spraggon and Robert Godby

Department of Economics Working Papers from McMaster University

Abstract: Using eight sessions (twenty-four ten-period markets) in a double ABA cross-over design, we demonstrate clear evidence of market power in double-auction emission trading markets (agents who are not constrained to only buy or sell). Conventional theory predicts that in half of the market-power environments monopsony should emerge and in half monopoly should emerge. Market-power outcomes are frequently observed, most often in the form of price discrimination, and most effectively by monopsonists.

Pages: 48 pages
Date: 1999-12
New Economics Papers: this item is included in nep-com, nep-ene and nep-env
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:1999-12

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