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| Volume2, No. 2,
August
2003
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Back |
| Does
the Varian Mechanism Work?--Emissions Trading as an Example |
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| Yasuyo Hamaguchi |
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Faculty of Economics, Kyoto
sangyo University, Japan |
| Satoshi
Mitani |
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| Matsui
Securities Co., Ltd., Japan |
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Tatsuyoshi
Saijo |
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Institute of social and Economic
Research, Osaka University, Japan |
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| Abstract |
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This
paper investigates whether Varian's(1994) compensation mechanism
can work in a laboratory. The results show that this mechanism
does not work as in the theory. We found that the magnitude of
penalties crucially affects subjects' behavior. |
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Key words: emissions
trading; compensation mechanism; experiments
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| JEL
classification:
C91; D62; Q25 |
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