Abstract
Emission permit markets are often thin. The conditions for emission permit markets to yield efficient outcomes are therefore not automatically satisfied. This paper shows — using a principal-agent framework — how the regulatory agency (the principal) can induce price-taking behavior by the firms (the agents) in emission permit markets.
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Romstad, E., Bergland, O. (1997). Manipulation of Emission Permit Markets. In: Nau, R., Grønn, E., Machina, M., Bergland, O. (eds) Economic and Environmental Risk and Uncertainty. Theory and Decision Library, vol 35. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-1360-3_5
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DOI: https://doi.org/10.1007/978-94-017-1360-3_5
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