Does the Varian Mechanism Work?--Emissions Trading as an Example

Yasuyo Hamaguchi (), Satoshi Mitani and Tatsuyoshi Saijo ()
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Satoshi Mitani: Matsui Securities Co., Ltd., Japan

International Journal of Business and Economics, 2003, vol. 2, issue 2, 85-96

Abstract: This paper investigates whether Varian's(1994) compensation mechanism can work in a laboratory. The results show that this mechanism does not work as in the theory. We found that the magnitude of penalties crucially affects subjects' behavior.

Keywords: emissions trading; compensation mechanism; experiments (search for similar items in EconPapers)
JEL-codes: C91 D62 Q25 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (12)

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Working Paper: Does the Varian Mechanism Work? -Emissions Trading as an Example (2004)
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