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Título:
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Auctioning emission permits with market power
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Autores:
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Álvarez González, Francisco ;
André García, Francisco Javier
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Tipo de documento:
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texto impreso
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Editorial:
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De Gruyter, 2016
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Dimensiones:
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application/pdf
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Nota general:
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info:eu-repo/semantics/restrictedAccess
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Idiomas:
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Palabras clave:
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Estado = Publicado
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Materia = Ciencias Sociales: Economía: Comercio
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Materia = Ciencias Sociales: Economía: Microeconomía
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Tipo = Artículo
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Resumen:
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We analyze emission permit auctions in a framework in which a dominant firm enjoys market power both in the auction and in the secondary market while its competitor behaves in a competitive way. We obtain linear equilibrium bidding strategies for both firms and a unique equilibrium of the auction, which is optimal ex-post for the dominant firm. Under specific distributional assumptions we conclude that the auction always awards less permits to the dominant firm than the cost-effective amount. Our results serve as a warning about the properties of auctioning under market power. Under interior solution the auction allocation is dominated by grandfathering in terms of aggregated cost with probability one. As a policy implication, the specific design of the auction turns out to be crucial for cost-effectiveness. The chances of the auction to outperform grandfathering require that the former is capable of diluting the market power that is present in the secondary market.
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En línea:
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https://eprints.ucm.es/55343/1/%C3%81lvarez-Auctioning%20Emission.pdf
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