Market power in an exhaustible resource market: The case of storable pollution permits.
Motivated by the structure of existing pollution permit markets, we study the equilibrium path that results from allocating an initial stock of storable permits to an agent, or a group of agents, in a position to exercise market power. A large seller of permits exercises market power no differently...
| Published in: | Economic Journal Vol. 121; no. 551; pp. 116 - 145 |
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| Main Authors: | , |
| Format: | Article |
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Wiley-Blackwell
March 2011
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=511467081&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 511467081 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00130133 EJN jtl: Economic Journal issn: 00130133 maglogo: N pubinfo: dt: March 2011 vid: 121 iid: 551 pid: 480 pub: Wiley-Blackwell artinfo: ui: 511467081 10.1111/j.1468-0297.2010.02366.x ppf: 116 ppct: 29 formats: tig: atl: Market power in an exhaustible resource market: The case of storable pollution permits. aug: au: Liski, Matti Montero, Juan-Pablo su: Market power Government policy on pollution Mathematical models Licenses Resource allocation -- Mathematical models Economic equilibrium sug: subj: Market power Government policy on pollution Mathematical models Licenses Resource allocation -- Mathematical models Economic equilibrium ab: Motivated by the structure of existing pollution permit markets, we study the equilibrium path that results from allocating an initial stock of storable permits to an agent, or a group of agents, in a position to exercise market power. A large seller of permits exercises market power no differently than a large supplier of an exhaustible resource. However, whenever the large agent's endowment falls short of his efficient endowment — allocation profile that would exactly cover his emissions along the perfectly competitive path — market power is greatly mitigated by a commitment problem, much like in a durable-goods monopoly. We illustrate our theory with two applications: the US sulphur market and the international carbon market that may eventually develop beyond the Kyoto Protocol. Reprinted by permission of the publisher. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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