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A simple auction mechanism for the optimal allocation of the commons

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Show simple item record Montero, Juan-Pablo en_US
dc.contributor.other Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. en_US 2009-04-03T17:07:17Z 2009-04-03T17:07:17Z 2006 en_US
dc.identifier 2006-008 en_US
dc.description.abstract Efficient regulation of the commons requires information about the regulated firms that is rarely available to regulators (e.g., cost of pollution abatement). Different mechanisms have been proposed for inducing firms to reveal their private information but for reasons I discuss in the paper, I find these mechanisms of limited use. I propose a much simpler mechanism that implements the first-best for any number of firms: a uniform price sealed-bid auction of an endogenous number of (transferable) licenses with a fraction of the auction revenues given back to firms. Paybacks, which decrease with the number of firms, are such that truth-telling is a dominant strategy regardless of whether firms behave non-cooperatively or collusively. en_US
dc.format.extent 33, [3] p en_US
dc.publisher MIT Center for Energy and Environmental Policy Research en_US
dc.relation.ispartofseries MIT-CEEPR (Series) ; 06-008WP. en_US
dc.title A simple auction mechanism for the optimal allocation of the commons en_US
dc.type Working Paper en_US
dc.identifier.oclc 159939543 en_US

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