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Please use this identifier to cite or link to this item: http://nbn-resolving.de/urn:nbn:de:hebis:34-2016081050649

Title: Uncertainty and Speculators in an Auction for Emissions Permits
Authors: Haita-Falah, Corina
???metadata.dc.subject.ddc???: 330 - Wirtschaft (Economics)
Issue Date: 16-Apr-2016
Publisher: Springer
Citation: In: Journal of Regulatory Economics, June 2016, Volume 49, Issue 3, pp. 315-343
Abstract: Auctions have become popular as means of allocating emissions permits in the emissions trading schemes developed around the world. Mostly, only a subset of the regulated polluters participate in these auctions along with speculators, creating a market with relatively few participants and, thus, incentive for strategic bidding. I characterize the bidding behavior of the polluters and the speculators, examining the effect of the latter on the profits of the former and on the auction outcome. It turns out that in addition to bidding for compliance, polluters also bid for speculation in the aftermarket. While the presence of the speculators forces the polluters to bid closer to their true valuations, it also creates a trade-off between increasing the revenue accrued to the regulator and reducing the profits of the auction-participating polluters. Nevertheless, the profits of the latter increase in the speculators' risk aversion.
URI: urn:nbn:de:hebis:34-2016081050649
additional URI: DOI: 10.1007/s11149-016-9299-1
???metadata.dc.description.everything???: European Union (EU) Horizon 2020 program, action ERC-2014-STG, Project HUCO, grant number 636846
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