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

Yasuyo Hamaguchi (), Satoshi Mitani and Tatsuyoshi Saijo ()

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

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.

Pages: 20 pages
Date: 2004-02
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Citations: View citations in EconPapers (2)

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Journal Article: Does the Varian Mechanism Work?--Emissions Trading as an Example (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:04009

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