Seller Incentive Properties of EPA′s Emission Trading Auction

摘要: Abstract The new Clean Air Act Amendments instruct the Environmental Protection Agency (EPA) to conduct annual sealed bid/offer auctions of emission allowances. auction pricing rules are discriminative and sellers with lowest asking prices receive highest bids. This paper assesses seller incentives this demonstrates that cause choose under-reveal their cost control. Furthermore, increasing number intensifies misrepresentation if buyers remains fixed. EPA′s can therefore generate significantly biased price signals reduce efficiency allowance trading market.