Alvarez, Francisco and André, Francisco J. and Mazón, Cristina (2016): Assigning pollution permits: are uniform auctions efficient?
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Abstract
We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders' demands are linear. We show that there is a continuum of interior Bayesian-Nash equilibria, and only one is effcient, minimizing abatement costs. We find that the existence of many bidders is not a sufficient condition to guarantee an efficient equilibrium in the uniform auction. Additionally, bidders' types have to be uncorrelated.
Item Type: | MPRA Paper |
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Original Title: | Assigning pollution permits: are uniform auctions efficient? |
English Title: | Assigning pollution permits: are uniform auctions efficient? |
Language: | English |
Keywords: | Emission permits, Uniform auction, Efficiency, Incomplete information Simultaneous games |
Subjects: | D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy |
Item ID: | 72827 |
Depositing User: | Dr. Francisco J Andre |
Date Deposited: | 02 Aug 2016 13:21 |
Last Modified: | 29 Sep 2019 03:15 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/72827 |