Breaking Collusion in Auctions through Speculation: An Experiment on CO2 Emission Permit Markets

The European Emission Trading Scheme (EU‐ETS) has chosen to adopt an auctioning procedure to initially allocate CO₂ emission permits. Free allocation of permits will become an exception for the third phase (2013–2020) and most firms will have to buy all their permits on the market or via auctions. The ability of bidders to collude is a key concern about the design of the auction format. To counter collusion, the auction can be open to bidders without compliance obligations (speculators). This paper aims at studying experimentally speculation as a collusion‐breaking device in two different auction mechanisms: the uniform‐price sealed‐bid auction and the ascending clock auction. Our results suggest that a uniform sealed‐bid auction open to speculators should be chosen from a revenue maximization point of view. In this mechanism, compliance agents adopt an aggressive strategy toward speculators. This strategy significantly increases the seller's revenue, compared to the more collusive clock auction. In the latter, on the contrary, bidders accommodate speculators, letting them buy permits in the auction and buying their necessary permits on the secondary market. However, as opening the auction to speculators deteriorates efficiency, the regulator faces a trade‐off between these two objectives.     

土地供给市场化后的出让总收入及预测模型设计

国有土地出让招拍挂制度的实施开启了我国土地供给的市场化,更公平、透明地揭示了土地的市场价值,同时为地方政府带来了一定的城市发展建设资金。然而,现行财税制度却加剧了地方财政对土地出让收入的依赖,由此滋生的种种问题导致土地出让收入成为舆论焦点。本文采用格兰杰因果分析、脉冲检验、自回归滞后分布模型等方法,通过实证研究寻找宏观经济变量与土地出让总收入的相互影响及数量关系,并据此推导建立土地出让收入模型,预测土地出让收入的数量及变化趋势,为各界真正了解土地财政以及政府把握土地供给与经济发展之间的关系提供一个理论途径。     

三种国债拍卖方式的拍卖收入比较研究

国债拍卖主要有美国式拍卖、荷兰式拍卖与混合式拍卖三种,但究竟哪一种拍卖方式的拍卖收入最大?学术界迄今尚无定论。文章对W-Z模型进行扩展,并在此基础上通过结合不同市场利率环境下投标者的不同风险偏好进行比较研究。结果表明:(1)当市场利率趋升时,若非竞争性投标量较大,则混合式拍卖收入最大;若非竞争性投标量较小,但竞争性投标者较少,且市场利率上升趋势极强,则同样是混合式拍卖收入最大,反之则荷兰式拍卖收入最大。(2)当市场利率趋降时,美国式拍卖收入最大。(3)当市场利率平稳时,何种拍卖方式收入最大无法确定。     

治理环境污染的经济制度安排

环境问题的外部性和环境资源的公共财产属性,决定了解决环境污染问题不能单纯依靠市场机制,需要政府的必要调控和干预,政府干预包括有关法规的制定和经济制度的安排。经济制度具有不可替代的效率作用,且应针对不同的情况安排与市场机制相沟通的不同制度形式,如“排污收费”,“治污收费”,“开征环境税”和“排污权交易”等,将环境保护由过去的政府行为转变为一种由政府调控与经济利益机制驱动相结合的市场行为和企业行为。     

Asymmetric information about rivals'' types in standard auctions

We study auctions in which bidders may know the types of some rival bidders but not others. This asymmetry in bidders' knowledge about rivals' types has different effects on the two standard auction formats. In a second-price auction, it is weakly dominant to bid one's valuation, so the knowledge of rivals' types has no effect, and the good is allocated efficiently. In a first-price auction, bidders refine their bidding strategies based on their knowledge of rivals' types, which yields an inefficient allocation. We show that the inefficient allocation in the first-price auction translates into a poor revenue performance. Given a standard regularity condition, the seller earns higher expected revenue from the second-price auction than from the first-price auction, whereas the bidders are better off from the latter.     

Investment Incentives Under Emission Trading: An Experimental Study

This paper presents the results of an experimental investigation on incentives to adopt advanced abatement technology under emissions trading. Our experimental design mimics an industry with small asymmetric polluting firms regulated by different schemes of tradable permits. We consider three allocation/auction policies: auctioning off (costly) permits through an ascending clock auction, grandfathering permits with re-allocation through a single-unit double auction, and grandfathering with re-allocation through an ascending clock auction. Our results confirm both dynamic and static theoretical equivalence of auctioning and grandfathering. We nevertheless find that although the market institution used to reallocate permits does not impact the dynamic efficiency from investment, it affects the static efficiency from permit trading.     

The sale of small firms: a multidimensional analysis

Summary. This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares. Received: July 4, 2001; revised version: October 31, 2002 RID="*" ID="*" The paper has benefited from a number of comments from the anonymous referees. Correspondence to: C. At     

Auctions with private uncertainty and resale opportunities

When an auction is followed by an opportunity for resale, bidder valuations are endogenously determined, reflecting anticipated profit from buying/selling in the resale market. These valuations vary with the resale market structure, can differ across auction types, and may be lower or higher than if resale were impossible. Although resale introduces a common value element to the model, revenue equivalence can hold; when it fails, this is due not to affiliation but to differences in information conveyed to the secondary market. Information linkages between markets can also lead to signaling and, in some cases, preclude separation in the auction.     

Demand reduction and preemptive bidding in multi-unit license auctions

Multi-unit ascending auctions allow for equilibria in which bidders strategically reduce their demand and split the market at low prices. At the same time, they allow for preemptive bidding by incumbent bidders in a coordinated attempt to exclude entrants from the market. We consider an environment where both demand reduction and preemptive bidding are supported as equilibrium phenomena of the ascending auction. In a series of experiments, we compare its performance to that of the discriminatory auction. Strategic demand reduction is quite prevalent in the ascending auction even when entry imposes a (large) negative externality on incumbents. As a result, the ascending auction performs worse than the discriminatory auction both in terms of revenue and efficiency, while entrants’ chances are similar across the two formats.     

A Note on Market Power in an Emission Permits Market with Banking

In this paper, we investigate the effect of market power on equilibrium path of an emission permits market in which firms can bank current permits for use in later periods. In particular, we study the market equilibrium for a large (potentially dominant) firm and competitive fringe with rational expectations. We characterize the equilibrium solution for different permits allocations and discuss the large firm’s stock-holding constraints needed for credible market manipulation.     

Spectrum auction designs and revenue variations

This study examines a sample of 93 national 3G spectrum auctions for the period 2000–2011 to identify the sources of substantial revenue variations. An implied reduced-form econometric model that recognises the censored nature of the sample relates per capita winning bid (per Mhz, per million populations) values to regulator-determined auction design characteristics, auction competitiveness, mobile wireless market conditions and spectrum package attributes identified from tender documents. The analysis reveals that among other factors, all auction design characteristics independently impact on realized 3G spectrum auction revenues.     

Tariffs versus anti-dumping duties

Tariffs and anti-dumping duties are two important tools used to protect industries from foreign competition and to generate revenue. While the two tools have been studied extensively in separate contexts, little is known about their comparative effects. This paper compares their effects on prices, profits, government revenue, industry protection, and welfare in a two-country framework where a dominant firm in one country exports to the other inhabited by an oligopoly. Conditions under which one tool dominates the other for a given criterion are provided.     

制约房地产业发展的因素及对策分析——以青岛为例

随着城市化进程的不断加速,房地产的价格日益高涨,出现了过高的房价与消费者过低的收入问的矛盾.产生这一矛盾的根源是政府的行政体制改革远远落后于经济体制改革.分税制改革直接导致中央与地方财权与事权的不统一,财政收入大部分流向中央.为增加地方财政收入,地方政府凭借其在土地市场的垄断而与房地产开发商的合谋,提高土地的拍卖价格,通过土地财政来增加地方收入.而投机者的大量入市,客观上增加了对房地产的需求,使得房地产的价格加速上涨.要遏制房价过快增长的势头,需在严格调控投机者入市、严格控制异地买房,建立全国统一和完善的住房信息统计系统方面做进一步的努力,房地产问题还是一个经济结构调整的问题,它需要进一步完善政府的财政税收体制,从制度上制约房价的进一步上涨.     

Fees and the Efficiency of Tradable Permit Systems: An Experimental Approach

The paper presents the results of an economic experiment in which the effects of fees on allocative efficiency of tradable utilization permits (e.g. pollution permits) are explored. Laboratory subjects (university students) play the roles of firms whose generic product requires a specific input or permits. Scarcity is exogenously introduced by a fixed supply of tradable production permits. Three treatments are compared: No fee imposed (N); a fixed tax per permit (T); and partial retraction of permits and subsequent redistribution by auction (A). Treatments T and A represent two different ways of imposing fees, which are designed to be revenue equivalent. Our results indicate that, after controlling for deviation of permit prices from a prediction based on fundamentals, fees have an impact on distribution of permits. Interestingly, a fixed tax enhances efficiency compared to the case of no fees while retraction and reallocation by auction tends to reduce efficiency. Apparently, subjects’ decision making is affected by the imposition of fees, but how and to what extent depends on the method used.     

An experimental test of design alternatives for the British 3G/UMTS auction

In spring 2000, the British government auctioned off licences for Third Generation mobile telecommunications services. In the preparation of the auction, two designs involving each a hybrid of an English and a sealed-bid auction were considered by the government: A discriminatory and a uniform price variant. We report an experiment on these two designs, and also compare the results to those with a pure English auction. Both hybrids are similar in efficiency, revenue differences disappear as bidders get experienced. Compared to the discriminatory format, the pure English auction induces more entry.     

The Informational Role of the EPA SO2 Permit Auction

We consider the ex ante informational implications of the mandatory surrender feature of a stylized emission permit auction, similar to that in the U.S. EPA SO₂ permit scheme, but modeled as a uniform price auction. The theory suggests that generally the auction gives misleading signals concerning the expected price of permits in the post-auction permit market; in the cases where the permit auction is designed to correctly predict the post-auction permit market equilibrium price, the permit auction preempts the permit market, and all trading occurs in the auction. Ex post auction/market experience suggests that the market may have enabled the auction and consequently raises the possibility that the market may have worked in spite of the auction and not because of it.     

Export revenue and quality: Firm‐level evidence from developing countries

I combine firm‐level export data from eight low‐income and middle‐income countries to test the relation between export price and export revenue. Across‐firm estimations show a strong positive association between export price and export revenue. Within‐firm estimations show that firms generate larger export revenue from their high‐price products. The positive correlation between export price and export revenue is strong for manufactures, weak for primary commodities, and nonexistent for extractables. Results are robust to using an alternative quality measure and controlling for exporters’ market power.     

Strategic manipulation of a pollution permit market and international trade

We consider a framework where firms which compete in an international product market are not all submitted to a pollution permit market. Using the Brander and Spencer’s framework (J Int Econ 18:83–100, 1985), we seek to determine the optimal strategies of both a dominant firm in the pollution permit market and the regulator in a such context. We first show that the dominant firm pursues a strategic manipulation to increase its profit. We also find that the regulator uses a sophisticated strategic policy to increase the domestic welfare by using two instruments: the initial allocation of pollution permits and the pollution cap.     

Second chance offers in auctions

This paper examines situations in which a seller might make a second chance (take-it-or-leave-it) offer to a non-winning bidder at a price equal to their bid at auction. This study is motivated by the take-it-or-leave-it second chance offer rules used by eBay and a number of state procurement agencies. Equilibrium bidder behavior is determined for IPV sealed bid first price, second price, English, and Vickrey auctions when a second chance offer will be made with an exogenous probability $p$ . In all but the Vickrey auction (which elicits the dominant strategy of bidding one’s value) equilibrium bids are lower than if there were no possibility of a second chance offer and higher than if a second chance offer will be made for certain. Further, the possibility of a second chance offer erodes the strategic equivalence between second price bids and English auction drop out levels. If bidders are risk averse (with CRRA preferences), this difference leads to expected revenue dominance of the second price over the English auction, both of which dominate the Vickrey auction. The first price auction is also shown to revenue dominate the Vickrey auction, and moreover, numerical results and intuition from existing literature suggest that the first price auction revenue dominates the second price auction.     

Pollution,public disclosure,and firm behavior

This paper looks at whether a government regulator should publicly announce the amounts of pollution emitted by individual firms and plants. Disclosure may be important if there is incomplete information about firm costs, since pollution levels may be used by the regulated firm as a signal of costs to rival firms. We compare the signaling games under public disclosure and no disclosure. Welfare is likely reduced by disclosure, but if the regulator can adjust the stringency of the relevant pollution regulations, then the loss in welfare can be smaller. The implications of these results for pollution permits markets are discussed.