The design, testing and implementation of Virginia’s NOx allowance auction

Porter, David; Rassenti, Stephen; Shobe, William; Smith, Vernon L.; Winn, Abel

doi:10.1016/j.jebo.2007.09.007

Cited by 55 publications

(28 citation statements)

References 15 publications

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“…The choice of this format was supported by experimental results reported in Porter et al (2009), showing that an ascending ("clock") uniform-price auction performed better in terms of efficiency and revenue than a sealed-bid alternative when demand was relatively elastic.…”

Section: Va Nitrogen Oxidementioning

confidence: 92%

Carbon Allowance Auction Design: An Assessment of Options for the U.S.

et al. 2010

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Carbon allowance auctions are a component of existing and proposed regional cap-and-trade programs in the U.S. and are also included in recent bills in the U.S. Congress that would establish a national cap-and-trade program in the U.S. to regulate greenhouse gases ("carbon"). We discuss and evaluate the two leading candidates for the auction format for carbon allowance auctions: a uniform-price sealed-bid auction and an ascending-bid dynamic auction, either of which could be augmented with a "price collar" to ensure that the price of allowances is neither too high nor too low. We identify the primary trade-offs between these auction formats as applied to carbon allowance auctions and suggest auction design choices that address potential concerns about efficiency losses from collusion and other factors. We conclude that a uniform-price sealed-bid auction is more appropriate for the sale of carbon allowances than the other leading choices, in part because it offers increased robustness to collusion without significant sacrifice in terms of price discovery.

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Section: Va Nitrogen Oxidementioning

confidence: 92%

Carbon Allowance Auction Design: An Assessment of Options for the U.S.

et al. 2010

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“…17 In the Final Buyer Advantage treatment, revenue is 83% of what would have been expected in an auction where resale was not possible. As bargaining power is shifted to the reseller in the resale market the revenue earned by the initial auction seller is approximately 96% of the revenue the auction could have earned without resale.…”

Section: E¢ Ciency and Revenue (Standard Resale)mentioning

confidence: 99%

“…However, there is a movement to switch towards an auction mechanism to distribute permits. 2 For more details on these auctions, see Porter et al(2009) 3 The primary industry for waste-generating …rms is generally not recycling. For example, carpet producers sell scrap …ber for recycling and bottling manufacturers produce scrap plastic.…”

Section: Introductionmentioning

confidence: 99%

Speculation and demand reduction in English clock auctions with resale

Saral

2012

Journal of Economic Behavior & Organization

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Many auctions are followed by a resale market which occurs when the winner of the auction resells the item won to one of the participants from the original auction. The existence of such transactions may initially appear counter intuitive. However, this paper will show that active inter-bidder resale results from payo¤ maximizing decisions in the auction that take into account the incentives of a resale opportunity. Speci…cally, I examine how the existence of an inter-bidder resale opportunity impacts bidder behavior in an English clock auction, and to what extent altering the bargaining power of the …nal buyer and reseller in the resale market determines the strategies followed in the initial auction, in an attempt to understand the existence of these inter-bidder transactions. Theoretical and behavioral analysis is used to develop hypotheses of speculation (bidding above value) and demand reduction (bidding below value) which are directly tested in a controlled experimental setting. While value bidding is a dominant strategy in a standard English clock auction without resale, when resale is allowed, this theoretical claim is weaker. Demand reduction is observed when the bargaining power is shifted to the …nal buyer in resale and when the bargaining power is shifted toward the reseller, speculation is observed. The revenue achieved in the initial auction depends on the behavior observed in the auction. Regardless of bargaining power, revenue is shown to decrease below what would have been earned in an English auction without resale due to demand reduction. When the reseller has the bargaining power, and speculation is observed, this loss in revenue is somewhat mitigated by increased speculation. JEL Codes: D44 C90

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“…Assessing the effectiveness as well 33 Though there is no reference to a specific behavioural effect it shall be mentioned here that experiments with different forms of auctions for allowances have shown a significant influence of these forms on the prices of these allowances and the revenues derived therefrom (cf. Reeson and Nolles 2009, p. 14;Porter et al 2009). as the efficiency of this approach depends on the behavioral background which the authors called "homo oeconomicus institutionalis" being characterized by cognitive limits and corresponding rule following. This is seen as a starting point for figuring out incentives for the agents being in conformity with the responsive regulation approach ( Führ and Bizer (2007) 34 A further elaboration of this approach is documented in this book (Part IV, Chap.…”

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confidence: 99%

Innovative Behavioral Approaches to Analyze the Incentives of Environmental Instruments

Beckenbach

2016

New Perspectives for Environmental Policies Through Behavioral Economics

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The design, testing and implementation of Virginia’s NOx allowance auction

Cited by 55 publications

References 15 publications

Carbon Allowance Auction Design: An Assessment of Options for the U.S.

Carbon Allowance Auction Design: An Assessment of Options for the U.S.

Speculation and demand reduction in English clock auctions with resale

Innovative Behavioral Approaches to Analyze the Incentives of Environmental Instruments

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