Strategic trade in pollution permits

Dickson, Alex and MacKenzie, Ian A. (2017) Strategic trade in pollution permits. Journal of Environmental Economics and Management, 87 94-113. doi:10.1016/j.jeem.2017.04.009

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Author Dickson, Alex
MacKenzie, Ian A.
Title Strategic trade in pollution permits
Journal name Journal of Environmental Economics and Management   Check publisher's open access policy
ISSN 0095-0696
Publication date 2017-01-01
Year available 2018
Sub-type Article (original research)
DOI 10.1016/j.jeem.2017.04.009
Open Access Status File (Author Post-print)
Volume 87
Start page 94
End page 113
Total pages 20
Place of publication Maryland Heights, MO United States
Publisher Academic Press
Language eng
Subject 2002 Economics and Econometrics
2308 Management, Monitoring, Policy and Law
Abstract Markets for pollution have become a popular regulatory instrument. In this article we investigate the implications of strategic trade in pollution permits. The permit market is developed as a strategic market game, where all firms are allowed to behave strategically and their roles as buyers or sellers of permits are determined endogenously with price-mediated trade. In a second stage, firms transact on a product market and we allow for a variety of market structures. We identify a unique equilibrium in permit exchange, investigate the properties of this equilibrium, and consider the effect of strategic behavior in the product market.
Keyword Market power
Pollution market
Strategic market game
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: HERDC Pre-Audit
School of Economics Publications
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Created: Wed, 24 May 2017, 16:35:42 EST by Alys Hohnen on behalf of School of Economics