This paper presents the results of an experimental investigation on incentives to adopt advanced abatement technology under emissions trading. Our experimental design mimics an industry with small asymmetric polluting firms regulated by different schemes of tradable permits. We consider three allocation/auction policies: auctioning off (costly) permits through an ascending clock auction, grandfathering permits with re-allocation through a single-unit double auction, and finally grandfathering with re-allocation through an ascending clock auction. We find that the treatments with an initial free allocation of permits (grandfathering) perform closer to the first best investment pattern than the treatment with pure auctioning. This result is mainly driven by higher efficiency in permit allocation in the treatments with grandfathering.JEL Classification: C92; D44; L51; Q28; Q55
We use a laboratory version of the intergenerational goods game (IGG) to investigate whether peer punishment facilitates the successful provision of multigenerational public goods. In our experiment, groups (generations) decide sequentially about the provision of a multigenerational public good through the voluntary contributions of their members. Successful provision requires that contributions meet a threshold and exclusively benefits members of future generations. Provision costs are borne only by the current generation. We compare a baseline condition without a punishment institution to a treatment condition where peer punishment can be inflicted exclusively on members of the same generation but not on members of past or future generations. We find that without punishment the likelihood of reaching the contribution threshold is low and that making punishment available within a generation is partially successful in sustaining cooperation in a succession of multiple generations.
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July 2013Abstract One key problem regarding the external validity of laboratory experiments is their duration: while economic interactions out in the field are often lengthy processes, typical lab experiments only last for an hour or two. To address this problem for the case of both symmetric and asymmetric Cournot duopoly, we conduct internet treatments lasting more than a month. Subjects make the same number of decisions as in the short-term counterparts, but they decide once a day. We compare these treatments to corresponding standard laboratory treatments and also to short-term internet treatments lasting one hour. We do not observe differences in behavior between the short-and long-term in the symmetric treatments, and only a small difference in the asymmetric treatments. We overall conclude that behavior is not considerably different between the short-and long-term.JEL Classification: L13, C93, C72, D43, D21 Keywords: internet experiment, Cournot oligopoly, long-term interactions, methodology, internet vs. laboratory experiment * We are grateful to the editor and two anonymous referees for useful comments and suggestions. We are thankful to Dennis Nissen for programming the experiment in Java and also to Markus Karde and Silke Werner for research assistance.
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