Thin and lumpy: an experimental investigation of water quality trading

Jordan F. Suter (), John Michael Spraggon () and Gregory L. Poe

No 104023, 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association

Abstract: 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.

Keywords: Environmental Economics and Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-exp
Date: 2011
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