Emission Trading with Shares and Coupons: A Laboratory Experiment
Stuart Mestelman () and
Andrew Muller ()
McMaster Experimental Economics Laboratory Publications from McMaster University
Increasing attention is being paid to emission trading programs for the control of air and water pollution. The United States EPA has implemented a tradable emission allowance program for sulphur oxide. The EPA auction has been investigated in the laboratory by Cronshaw and Brown-Kruse and by Franciosi, Isaac, Pingry, and Reynolds. A somewhat different proposal has been made for controlling nitrous oxides in southern Ontario. Trade would occur in coupons (emission permits) and shares (entitlements to coupons). This paper reports a laboratory investigation of the Canadian proposal in which the experimental design developed by Cronshaw and Brown-Kruse was modified to reflect the proposed Canadian institution. The results indicate dispersed but relatively stable prices, higher efficiency than obtained in related experiments modelling the EPA plan, and little arbitrage between share and coupon prices. The results could be due to differences in the market institutions or the training of the subjects.
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://socserv.socsci.mcmaster.ca/econ/faculty/mullera/papers/ejpaper.ps [301 Moved Permanently]--> https://socialsciences.mcmaster.ca/econ/faculty/mullera/papers/ejpaper.ps)
Journal Article: Emission Trading with Shares and Coupons: A Laboratory Experiment (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcm:mceelp:1994-01
Access Statistics for this paper
More papers in McMaster Experimental Economics Laboratory Publications from McMaster University Contact information at EDIRC.
Bibliographic data for series maintained by ().