Strategic Manipulation of Pollution Permit Markets: An Experimental Approach

摘要: In this paper we employ experimantal economic methods to examine the effect of market structure on use marketable emmisions permits. particular, ask whether firms can strategically manipulate a product using emissions Subjects participate in two markets, permit and market. They permits reduce cost production final goods that they sell Four treatments are used test effects initial allocation structure. The first explore "simple" manipulation. case all price takers but must compete both thus opening potential as form predation. Results show with one dominant firm number fringe firms, strategic manipulation occurs repeatedly laboratory uses licenses an inefficient manner order minimize its costs, increase profits exclude rivals Further these finding indicate, far from improving efficiency decreasing society pollution control, implementation tradable markets where there position power may decrease efficiency.