Change search
ReferencesLink to record
Permanent link

Direct link
Opportunity cost for Free Allocations of Emissions Permits: An Experimental Analysis
Swedish National Road and Transport Research Institute.ORCID iD: 0000-0002-1819-0805
Show others and affiliations
2010 (English)In: Environmental and Resource Economics, ISSN 0924-6460, E-ISSN 1573-1502, Vol. 46, no 3, 331-336 p.Article in journal (Refereed) Published
Abstract [en]

An important feature of emissions trading is how emissions permits are allocated. The choice between an auction and free allocation should not influence firms' production choices nor consumer prices according to economic theory. However, many parties expect the method of allocation to affect product prices. This paper describes an experimental investigation into price determination under a cap-and-trade program with different allocation methods. Participants initially display diverse pricing strategies. However, given a simple economic setting in which earnings depend on behavior, we find that subjects learn to consider the opportunity cost of permits and overall behavior moves toward the economic prediction.

Place, publisher, year, edition, pages
2010. Vol. 46, no 3, 331-336 p.
Keyword [en]
Auction, Emissions allowances, Grandfathering
National Category
URN: urn:nbn:se:kth:diva-61570DOI: 10.1007/s10640-010-9343-zISI: 000278401900005OAI: diva2:479372
QC 20120302Available from: 2012-01-17 Created: 2012-01-17 Last updated: 2012-03-02Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text

Search in DiVA

By author/editor
Mandell, Svante
In the same journal
Environmental and Resource Economics

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 25 hits
ReferencesLink to record
Permanent link

Direct link