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An efficient and implementable auction for environmental rights

Peyman Khezr () and Ian MacKenzie ()

No 587, Discussion Papers Series from University of Queensland, School of Economics

Abstract: This article proposes a simple and efficient auction design to allocate environmental rights, such as tradable pollution permits. We show that if the auctioneer limits the number of bids that each buyer submits—coupled with a simple ex-post supply adjustment rule—then truthful bidding is obtained. Consequently, the uniform-price auction becomes efficient and revenue superior to conventional uniform-price auctions 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)
New Economics Papers: this item is included in nep-des, nep-ene, nep-env, nep-gth, nep-mic and nep-reg
Date: 2018-02-27
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:587

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