The Design, Testing, and Implementation of Virginia's Nox Allowance Auction
Posted: 28 Jun 2014
Date Written: October 25, 2006
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
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