Using history dependence to design a dynamic tradeable quota system under market imperfections
Author
Armstrong, Claire W.Abstract
A transferable quota system is analysed in a two-period model with market power. So far, the
management mechanisms presented in the literature to remedy market power have either not
succeeded in securing efficiency in the distribution of quota within and across time periods, or
have resulted in only one of the two inefficiencies being eliminated. In this paper a new
mechanism is introduced where allocation of quota is made dependent upon historic quota
acquisitions. This opens for a trade-off between distributional and time efficiency, or under
specific circumstances securing overall efficiency.
Publisher
Universitetet i TromsøUniversity of Tromsø
Series
Working paper series in economics and management, 2003, nr 5Metadata
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