The Design, Testing, and Implementation of Virginia's Nox Allowance Auction

Posted: 28 Jun 2014

See all articles by David Porter

David Porter

Chapman University - The George L. Argyros School of Business & Economics

Stephen J. Rassenti

George Mason University - Interdisciplinary Center for Economic Science (ICES)

William Shobe

University of Virginia - Center for Economic and Policy Studies; Frank Batten School of Leadership and Public Policy

Vernon Smith

Independent

Abel Winn

Chapman University - The George L. Argyros School of Business & Economics

Date Written: October 25, 2006

Abstract

We report on the design and testing of three auction mechanisms to maximize revenue and efficiency in the sale of two vintages of nitrous oxide emission allowances by the Commonwealth of Virginia in 2004. The three mechanisms considered were a combinatorial sealed bid (CSB) auction, a sequential English clock (SEC) auction, and a combinatorial English clock (CEC) auction. We find the SEC and CEC mechanisms to be superior the CSB when demand is relatively elastic.

Keywords: auctions, cap and trade, emission markets, allowance auctions

Suggested Citation

Porter, David and Rassenti, Stephen J. and Shobe, William and Smith, Vernon and Winn, Abel, The Design, Testing, and Implementation of Virginia's Nox Allowance Auction (October 25, 2006). Journal of Economic Behavior and Organization, Vol. 69, No. 2, 2009, Available at SSRN: https://ssrn.com/abstract=2459677

David Porter (Contact Author)

Chapman University - The George L. Argyros School of Business & Economics ( email )

Orange, CA
United States
(714) 997-6915 (Phone)
(714) 628-2881 (Fax)

Stephen J. Rassenti

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

William Shobe

University of Virginia - Center for Economic and Policy Studies ( email )

Box 400206
Charlottesville, VA 22904-4206
United States
434-982-5376 (Phone)

HOME PAGE: http://www.virginia.edu/ceps

Frank Batten School of Leadership and Public Policy ( email )

235 McCormick Rd.
P.O. Box 400893
Charlottesville, VA 22904-4893
United States
434-982-5376 (Phone)

HOME PAGE: http://people.virginia.edu/~wms5f

Vernon Smith

Independent ( email )

Abel Winn

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States

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