Price and Quantity 'Collars' for Stabilizing Emissions Allowance Prices: An Experimental Analysis of the EU ETS Market Stability Reserve

摘要: This paper reports the results of a laboratory experiment with financially motivated participants that is used to compare alternative proposals for managing time path emissions allowance prices in face random firm-specific and market-level structural shocks. In this setting, market performance measures such as social surplus are enhanced by use price collar (auction reserve soft cap). Comparable enhancements not observed implementation quantity adjusts auction quantities response privately held inventories unused allowances. fact, some specifications, performed worse than no stabilization policy at all. The implemented specific set elements, extrapolation other settings should be done caution. Nevertheless, an examination behavioral patterns deviations from optimal behavior suggests has important (although perhaps exclusive) role play constructing effective stability policy.