An allocatively efficient auction for pollution permits

Peyman Khezr and Ian MacKenzie

Environmental & Resource Economics, 2021, vol. 78, issue 4, No 2, 585 pages

Abstract: Abstract This article proposes a new auction design for the efficient allocation of pollution permits. We show that if the auctioneer restricts the bidding rule of the uniform-price auction—coupled with a simple ex-post supply adjustment rule—then truthful bidding is obtained. Consequently, the uniform-price auction is more allocatively efficient than conventional formats that are currently observed in pollution markets.

Keywords: Auctions; Multi-unit; Uniform-price; Efficiency; Pollution (search for similar items in EconPapers)
JEL-codes: D44 D82 L10 Q50 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10640-021-00543-3

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