Price discovery and intermediation in linked emissions trading markets: A laboratory study

Many new and proposed emissions trading systems involve multiple countries and regions. The introduction of interregional trading raises questions about how flexible state- or national-level authorities should be in allowing individual firms to trade with firms or authorities in other states or countries. This paper uses laboratory methods to evaluate the efficiency and pricing performance of linking trading across regions at the firm-to-firm level. In one treatment, individual firms trade directly with firms or authorities in other regions. We compare performance in this treatment to an intergovernmental trading treatment, where emissions trading is restricted to occur only between intermediaries. A baseline treatment of autarky, where firms only trade with other firms in their country or region, provides a benchmark to assess the efficiency benefits of allowing linking. Although efficiency and price discovery are both improved by allowing intermediation in linked permit markets, we find that further gains can be realized through direct firm to firm trading. Buyers in high cost regions and sellers in low cost regions benefit the greatest from linking.     

The Ethical Outlook of Micro Business Operators

This paper reports the findings of an investigation into the ethical outlook of micro business operators. The study was conducted in Australia and is the first such examination of ethical perspectives in this segment of the business population. Micro business is internationally recognizable, economically significant, and strongly entrepreneurial, and it has a high level of control over the values it enacts. The study indicates that ethical considerations are important to Australian micro business operators. While no one single ethical perspective was dominant, nonreligious beliefs and principles were found to be the most important determinant of their ethical values. Some variation was discovered in operator attitudes based on age, gender, and education.     

Comparing Travel Cost Models And The Precision Of Their Consumer Surplus Estimates: Albert Park And Maroondah Reservoir

This study examines different types of Travel Cost Models to estimate and compare the recreational values of two parks in Victoria, Australia: Maroondah Reservoir and Albert Park. Zonal Travel Cost models and a number of different functional forms are used in this study. Standard errors are used to estimate upper and lower bounds for the recreational value estimates, enabling comparison between the precision of the different types of Travel Cost Models and functional forms estimated. The double log functional form city zone Travel Cost Model was chosen as the best estimate for Albert Park's recrea-tional value at $22.9 million per year. Maroondah Reservoir's best estimate is provided by the double log functional form regional zone Travel Cost Model at a value of $2.5 million per year, consider-ably less than that of Albert Park. Albert Park is found to have a comparatively larger 'proximity power' (attracting many more visitors) while Maroondah Reservoir exhibited a larger degree of 'pulling power' (a higher proportion of its visitors travel further distances).     

Testing for Son Preference in South Africa

Evidence from many developing countries suggests that parentshave a preference for sons over daughters. This has been referredto as son preference. This paper uses individual level unitrecord data to test the son preference hypothesis in South Africa.We use an accelerated hazard model to estimate the durationbetween successive births and our results indicate that sonpreference exists only for the Indian community in South Africa.Indian households are observed to have a higher duration betweenchildren following the birth of a son, irrespective of the numberof children they already have. For the rest of the population,there is very little evidence of son preference. Preferencefor sons could be the result of a combination of factors includingreligious beliefs and social customs such as the dowry system,lineage and familial and kinship ties.     

An Experimental Study of Electronic Bulletin Board Trading for Emission Permits

This paper reports a laboratory experiment that studies several features of a tradable emission permit program recently implemented in the Los Angeles area. The experiment focuses on the new Electronic Bulletin Board trading institution, in which firms publicly post proposed terms of trade. Potential trading partners can review this information online, and transactions are executed following bilateral negotiation. The experiment includes trading restrictions implemented in the regulations due to the geography of Los Angeles. We find that the bulletin board market performs well and that prices reflect market conditions as accurately as in the continuous double auction trading institution.     

By chance or by choice? Biased attribution of others’ outcomes when social preferences matter

Experimental Economics - Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and...     

Does the size of the action set matter for cooperation?

We use the voluntary contribution mechanism to investigate whether smaller action sets lead to higher cooperation rates. We find that this is the case for groups of four players.     

Analysis of prices in tradable emission markets: an empirical study of the regional clean air incentives market in Los Angeles

The Regional Clean Air Incentives Market is an emissions trading programme, which is expected to help in reducing oxides of nitrogen and sulphur from stationary sources in the Los Angeles area. This paper uses econometric techniques to determine the factors that can explain the development of the price of emission permits. By controlling for various characteristics of the trades, the regression results allow one to isolate the impact of each factor and conduct a detailed analysis of the implications of this factor on price. The results show that the price of permits is affected by institutional factors such as the trading rules and regulations governing the permit programme. The permits are priced higher in the coastal zone, higher for trades recorded in 1997 as compared to 1994 or 1995 and are affected by the trader category. Brokers are involved in well over half of the trades and have acquired a substantial inventory of permits. Facilities buying from brokers pay higher prices than if they buy from another facility. The price of trades beyond 2003 is higher than for current trades, which could be indicative of expectations of high growth rates in the Los Angeles region or due to expectation of more stringent regulations in the future.