Discriminatory auctions lead to lower allowance prices: evidence from the United States

Yu Xia ()
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Yu Xia: Department of Economics, Syracuse University

Economics Bulletin, 2025, vol. 45, issue 4, 1735 - 1743

Abstract: This study develops an equilibrium strategy for specific auction scenarios by optimizing the Symmetric Independent Private Value model to analyze the behavior of buyers and sellers throughout the auction process, examine the price and quantity proportion of sulfur dioxide auctions, and ascertain the impact of discriminatory auction forms on low auction prices. The results indicate that agents have incentives to lower prices, discriminatory auctions adversely affect allowance prices, and common value and market concentration further undermine the effectiveness of the auction mechanism.

Keywords: allowance price; common value; discriminatory auction; equilibrium strategy; market concentration (search for similar items in EconPapers)
JEL-codes: C7 D4 (search for similar items in EconPapers)
Date: 2025-12-30
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