an experimental investigation of the hahn noll revenue neutral auction for emissions licenses abstract this paper reports on three series of laboratory experiments designed to test the performance of the hahn noll revenue neutral auction rna an alternative institution a no rebate uniform price auction upa is also examined as a benchmark in these experiments the rna markets were little different from upa markets in terms of either prices or market efficiencies the two institutions did differ in terms of the distribution of the gains from exchange and of the propensity of bidders to engage in a certain type of overbidding

ex day behavior tax or short term trading effects this study examines the behavior of share prices around the ex dividend dates before and after the introduction of the 1988 income and corporation taxes act that reduced substantially the tax differential between dividends and capital gains in the united kingdom we find that in the pre 1988 period when the differential taxation of dividends and capital gains is high ex day returns are positive and significant in contrast in the post 1988 period ex day returns are in most cases negative and insignificant further analysis reveals that while ex day returns are significantly related to dividend yield and to the length of the settlement period they are not affected by the commonly used measures of transaction costs such as the bid ask spread and trading volume or by the day of week month of the year type of dividend distribution or number of days to the actual receipt of the cash dividend we conclude that taxation affects significantly ex day share prices in the previous studies have documented that the risk adjusted abnormal returns on the ex dividend dates are positive and significantly related to the dividend yield the interpretation of these findings is however controversial the question relates to what category of investors sets ex day prices elton and

individual risk attitudes measurement determinants and behavioral consequences this paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects homes using a question asking people about their willingness to take risks in general we find that gender age height and parental background have an economically significant impact on willingness to take risks the experiment confirms the behavioral validity of this measure using paid lottery choices turning to other questions about risk attitudes in specific contexts we find similar results on the determinants of risk attitudes and also shed light on the deeper question of stability of risk attitudes across contexts we conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks occupational choice and smoking the question about risk taking in general generates the best all round predictor of risky behavior

representative trust and reciprocity prevalence and determinants this paper provides evidence about the determinants of trust and reciprocal inclinations that is a tendency for people to respond in kind to hostile or kind actions in a representative setting we investigate the prevalence of reciprocity in the population the correlation between trust and positive and negative reciprocal inclinations within person the individual determinants of reciprocity and the relationship with psychological measures of personality we find that most people state reciprocal inclinations in particular in terms of positive reciprocity as well as substantial heterogeneity in the degree of trust and reciprocity trust and positive reciprocity are only weakly correlated while trust and negative reciprocity exhibit a negative correlation in terms of determinants being female and increasing age are associated with stronger positive and weaker negative reciprocal tendencies taller people are more positively reciprocal but height has no impact on negative reciprocity psychological traits also affect trust and reciprocity jel d63 j3 j6

optimal incentive contracts under inequity aversion we analyze the classic moral hazard problem with the additional assumption that agents are inequity averse the presence of inequity aversion alters the structure of optimal contracts when the concern for equity becomes more important there is convergence towards linear sharing rules the sufficient statistics result is violated depending on the environment contracts may be either overdetermined i e include non informative performance measures or incomplete i e neglect informative performance measures finally our model delivers a simple rationale for team based incentives implying wage compression 2010 elsevier inc

an economic analysis of scrappage this article examines the impact of policies aimed at encouraging the retirement of older high polluting vehicles such as the cash for clunkers policy endorsed by president george bush in 1992 the analysis assesses the likely benefits and costs of vehicle scrappage programs i also address the interaction of a scrappage program with other ongoing policies such as improved inspection and maintenance finally the simulation for los angeles suggests plausible design values for a scrappage program

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

what can we learn from the grand policy experiment lessons from so2 allowance trading stable url http links jstor org sici sici 0895 3309 28199822 2912 3a3 3c69 3awcwlft 3e2 0 co 3b2 tthe journal of economic perspectives is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgtue jun 26 16 25 17 2007

dividend yield and expected returns abstract previous research examining the relation between dividend yield and equity returns documents a u shaped pattern arising from the positive capm adjusted average excess return of zero dividend firms in contrast this paper reports that zero dividend firms earn negative average excess returns relative to firms of similar size despite the apparent conformity of these results to the predictions of after tax asset pricing models the negative size adjusted excess returns cannot be drive solely by tax effects these excess returns which are concentrated in the initial zero dividend years and approach 1 per month are attributed to possible dividend expectation effects rather than taxes

transaction costs in pollution markets an empirical study this paper studies a market in pol lution permits launched in los angeles in 1994 this tradable permit market has been projected to lead to substantial cost savings due to the flex ibility it provides firms in terms of compliance with environmental regulation this paper shows that transaction costs can play an important role in the initial years of the program the transac tion cost variables have been defined to include search costs and information costs these costs are significant in explaining non participation of some firms in the market the study also draws policy implications for the development of future emissions trading programs jel q28 q25

you get what you pay for incentives and selection in the education system we analyse worker self selection with a special focus on teachers to explore whether worker composition is generally endogenous we analyse laboratory experimental data to provide causal evidence on particular sorting patterns our field data analysis focuses specifically on selection patterns of teachers we find that teachers are more risk averse than employees in other professions indicating that relatively risk averse individuals sort into teaching occupations under the current system using survey measures on trust and reciprocity we find that teachers trust more and are less negatively reciprocal than other employees and establish differences in personality based on the big five concept

new directions in emissions trading the potential contribution of new institutional economics abstract once an arcane topic even among environmental economists emissions trading systems have substantially increased during this past decade in the usa moreover the implementation of these systems has necessitated increased involvement of professionals in many fields besides economics this paper reviews the practical experience of the six major types of emissions trading systems focusing on credit market development participation and results including transaction costs five more recent applications of emissions trading also are considered as well as the possibility of inter pollutant trading while inter pollutant trading has been successfully used for chlorofluorocarbons cfcs the applicability of this experience is probably very limited additionally it would be highly premature to attempt an evaluation of these newer emissions trading systems some of which have yet to be even partially implemented in order to improve these latter and future programs the paper considers the potential contribution of the new institutional economics nie to emissions trading the nie is used to develop theoretical insights and a series of predictions about the performance of a range of emissions trading systems

sulfur allowance trading and the regional clean air incentives market a comparative design analysis of two major cap and trade permit programs this paper investigates in detail the design parameters of the two mostprominent us cap and trade permit program the us epa sulfur allowancetrading program and the south californian regional clean air incentivesmarket reclaim in contrast to expectations the two programs turn out to be rather different in several important design parameter choices common elements emerge primarily in the existence of an ambitious quantifiedenvironmental target mandatory use of stringent emission monitoring methodsand stiff penalties for non compliance coexisting command and controlregulations the creation of a competitive permit market structure andsome distributional concessions in the initial permit allocation generalizing from these common features we find that provisions to assurepolitical acceptance functional interdependencies and overlapping regulation are the most important influences on the design of applied cap and trade permit programs

do women shy away from competition do men compete too much we examine whether men and women of the same ability differ in their selection into a competitive environment participants in a laboratory experiment solve a real task first under a noncompetitive piece rate and then a competitive tournament incentive scheme although there are no gender differences in performance men select the tournament twice as much as women when choosing their compensation scheme for the next performance while 73 percent of the men select the tournament only 35 percent of the women make this choice this gender gap in tournament entry is not explained by performance and factors such as risk and feedback aversion only playa negligible role instead the tournament entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition the result is that women shy away from competition and men embrace it

pricing and regulating affect environmental ethics effluent charges and tradeable permits are economically efficient but rarely used a new explanation for this discrepancy is offered pricing may crowd out environmental ethics in the pricing and via spillovers also in non pricing sectors pricing may therefore increase pollution providing a reason why decision makers tend to reject environmental pricing five propositions showing the conditions for counterproductive effects are advanced they are consistent with available empirical evidence regulation by setting standards and subsidies damage environmental ethics less than pricing because pollution is condoned damaging environmental ethics may prevent political action in favor of the environment

dividends and capital asset prices tax based dividend models of capital asset pricing assume that dividends are known at the time prices are set dividends which are announced and paid in the same month and dividends which were expected but cancelled in the month constitute surprises which interfere with many empirical tests of the effects of expected dividend yield on returns this paper avoids these problems by relating returns to forecasts of dividend yield obtained from past data three distinct views of the importance of dividends to investors have received support at one time or another according to the two most important views dividends have a neutral and a negative effect on security prices respectively miller and modigliani 1 and miller and scholes 12 13 favor complete substitutability of dividends and capital gain brennan 6 and litzenberger and ramaswamy 9 have developed models which incorporate differential taxation of income and capital gain in these models the tax disadvantage of income changes the investor s portfolio problem from one of optimization of mean and variance of portfolio before tax return to optimization in after tax terms stocks with relatively large dividend yields should provide high expected returns and so sell for low prices to compensate the investor for the tax much of the empirical evidence seems to favor the view that tax disadvantages of dividend income do not escape investors attention and that returns are higher when they include dividend income to compensate the investor for the tax liability however interpretation of the available evidence is difficult and it is significant that most of these researchers remain unconvinced that their own findings can be satisfactorily explained by tax effects ball brown finn and officer 1 interpret their estimates as being far too strong to be explained in terms of differential taxation blume 3 reaches a similar conclusion but litzenberger and ramaswamy attribute their results to the tax disadvantage of

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

a simulation based approach to the study of coefficient of variation of dividend yields abstract existing empirical studies of dividend yields and dividend policies either make no assumption or the normal distribution of the dividend yields data the statistical results will be biased because they cannot reflect the finite support set property of dividend yields which can only range from 0 to 1 we posit that the assumption that dividend yields follow a beta distribution is more appropriate the coefficient of variation cv is used to measure the stability of dividend yields if we assume dividend yields follow a normal distribution then the maximum likelihood estimate for coefficient of variation is given by s x this only gives us a point estimate which cannot depict the full picture of the sampling distribution of the coefficient of variation a simulation based approach is adopted to estimate cv under the beta distribution this approach will give us a point estimate as well as the empirical sampling distribution of cv with this approach we study the stability of dividend yields of the hang seng index and its sub indexes of the hong kong stock market and compare the results with the traditional approach

regulatory constraints on environmental markets abstract there have been several recent regulatory reforms aimed at promoting economic efficiency these reforms fall into two broad categories those aimed at promoting competition in specific industries and those aimed at addressing problems that cut across several industries this analysis examines two reforms that fall into the latter category both of these policies are specifically designed to enhance environmental quality while promoting cost savings the analysis focuses on the biases and inefficiencies associated with the use of these policies the paper concludes with a discussion of the possibility of designing more efficient alternatives in light of the political constraints that are imposed on regulators

are housing bubbles contagious a case study of las vegas and los angeles home prices this paper asks whether speculative house price pressure in an economic center can spill into related housing markets in other words are bubbles contagious i develop a theoretical model that allows for speculative price appreciation to spread from one market to another i estimate an error correction model using quarterly housing data for las vegas and los angeles and fundamental market variables from 1978 quarter 2 through 2008 quarter 1 las vegas prices show significant persistence and adjust slowly to disequilibrium contagious price and income growth from the los angeles market sustained by naive expectations contributed to the bubble that formed in las vegas

in markets we trust setting the boundaries of market based instruments in ecosystem services governance abstract a growing tendency to frame environmental problems as a failure to price ecosystem services has coincided with the rise of so called market based instruments mbis the aim of this introductory article to the special section in markets we trust contrasting views on the performance and legitimacy of market based instruments in global environmental governance is to promote critical reflection about the nature scope and limits of mbis in ecosystem services governance and to provide guidance on where the boundaries for the application of markets ought to be set first we examine the role that methodological assumptions and implicit normative positions play in shaping academic perception of the effectiveness and legitimacy of mbis second we examine mbis in the broader ideological context and socio political processes that have favored their development and implementation third we test claims of the literature on mbis against insights and data from case studies presented in the special section fourth we discuss the scope and limits of markets in ecosystem services governance in the light of biophysical institutional and normative boundaries we end with a summary of concluding remarks from the special section and by identifying critical tasks for the scientific and policy agenda on ecosystem services governance

taxes and company dividends a micro econometric investigation exploiting cross section variation we use panel data for 1 218 uk industrial and commercial companies between 1970 and 1990 to investigate whether dividends are affected by taxes cross section variation in the tax cost of paying dividends results from surplus advance corporation tax act affecting some firms during this period observations on firms moving into and out of surplus act allow us to identify the effect of taxes whilst controlling for unobserved firm specific influences our results suggest that the tax cost has a statistically significant and quantitatively important influence on dividends

thin versus thick co2 market abstract the idea that trading is more costly the thinner the market is is common in most studies of market exchange with frictions surprisingly this element is lacking from previous attempts to allow for frictions in pollution permit markets this paper considers a co 2 cap and trade model where trading costs develop endogenously as a function of the market size the pre trade allocation of permits determines whether the market size can be strongly influenced by expectations that have a role because of adjustment costs the pre trade allocation also sets preconditions for endogenously vanishing trading costs and thus has nonstandard effects on long run trading levels and market allocations

analysis of prices in tradable emission markets an empirical study of the regional clean air incentives market in los angeles the regional clean air incentives market is an emissions trading programme which is expected to help in reducing oxides of nitrogen and sulphur from stationary sources in the los angeles area this paper uses econometric techniques to determine the factors that can explain the development of the price of emission permits by controlling for various characteristics of the trades the regression results allow one to isolate the impact of each factor and conduct a detailed analysis of the implications of this factor on price the results show that the price of permits is affected by institutional factors such as the trading rules and regulations governing the permit programme the permits are priced higher in the coastal zone higher for trades recorded in 1997 as compared to 1994 or 1995 and are affected by the trader category brokers are involved in well over half of the trades and have acquired a substantial inventory of permits facilities buying from brokers pay higher prices than if they buy from ano

a new approach to estimating value income ratios with income growth and time varying yields abstract value income ratios such as dividend yields in finance and price rent ratios in housing and real estate markets impact society in a variety of ways this paper proposes a new type of the present value model that features income growth with time varying yields it offers a new risk perspective which may alleviate timid investor behavior in market downturns while cooling down the market in seemingly booming times a binding relationship the value income ratio adjusted by yields of the asset and growth in income is revealed this has notable implications for empirical research which examines value income ratios time and again incorrectly perceived market behavior distorts the formation of investor behavior and vice versa which has serious consequences to the functioning of the market and beyond

the political economy of pollution markets historical lessons for modern energy and climate planners this article explores some of the central economic and political problems with the use of tradable permits to solve environmental problems drawing from transaction cost economics political economy and market theory it does so by looking at the history of three programs for curbing pollution in the united states the clean air act the leaded gasoline phase out and water permits in wisconsin the article begins by briefly summarizing the history of each of these programs before looking at a host of challenges related to political compromises in program design transaction costs spatial distortions such as geographic sensitivity and wrong way trading of credits temporal distortions such as the episodic nature of pollution and volatility of market prices and market abuses these concerns are raised with an eye for how historical experience may inform the current debate about how to design effective market mechanisms to respond to climate change and other forms of energy related environmental degradation

environmental regulation a value theoretic and class based analysis following a value theoretic and class based approach it is argued in this paper that ecological problems are inseparably linked to the process of extracting surplus value in capitalism and owing to their adverse impacts instigate struggles over the appropriation of nature these struggles fought within and outside the state by competing agents shape environmental regulation in particular taxes permits command and control measures and subsidies affect prices profits and rents and have class and other social implications evidence of current environmental regulation shows that it takes places under the great influence of capitalist concerns

entitling the pollutee liability versus standard under private information this paper considers and compares two different legal means full liability and standard to reduce and to regulate pollution at a local level accounting for private information about benefits and costs the familiar polluter pays principle makes the polluter liable for any damage since the courts lack information about the true damage the pollutee can and presumably will overstate this damage nevertheless voluntary arrangements bypassing the courts exist e g for coasean reasons however such out of court arrangements fail to improve in many cases the inefficient allocation of pollution due to agency costs given these unsatisfactory consequences of the polluter pays principle even after allowing for contracts around the law we propose a modification of standards the pollutee is entitled that a certain standard is satisfied yet can trade this right for financial compensations contracts induced by this legal rule are countervailing the optimal mechanism switches between subsidies and payments and first best efficiency holds at both ends and this characteristic allows such a privatized standard to track the first best quite well and often better than the polluter pays principle this relative ranking under private information is the opposite of the one that holds under uncertainty here liability dominates the standard

the price dividend ratio and limits to arbitrage evidence from a time varying estr model abstract recent share price dynamics has led to much debate within academic and practitioner circles researchers have typically argued that either a bubble component exists within prices or that the price dividend relationship exhibits persistence this note shows that an empirical model designed to capture limits to arbitrage can explain the movement in prices over the recent past

a simple examination of the empirical relationship between dividend yields and deviations from the capm abstract several papers have been published in recent years dealing with both the theoretical and the empirical impact of dividend yields on security returns dividends have been postulated as affecting stock returns because of tax effects agency costs and the wealth transfer hypothesis in this paper we perform a purely empirical examination of whether and to what extent deviations from the zero beta form of the capm are explained by divident yields the paper demonstrates that dividend yield has a large and statistically significant impact on return above and beyond that explained by the zero beta form of the capm this is consistent with the findings of litzenberger and ramaswamy in addition our results are consistent with the findings of small firm effects

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

scope and limits of the market mechanism in environmental management abstract this paper tries to evaluate the role of the market mechanism in environmental management and warns against reductionist views on the causes and remedies of environmental damages according to some of these views proper pricing of the environment and extensive use of market mechanisms in environmental management would solve environmental problems but various conditions tell against such simplifications namely the complex causality behind environmental damages the complexity of the functions and values of nature as well as limitations of the market mechanism in coping with the functions and services of nature several of those limitations the difficulties of defining and enforcing property rights to nature s functions and services the pervasiveness of externalities conditioned by the public goods characteristics of many environmental functions and values the difficulties in enticing processing and using information about environmental goods and the high transaction costs caused by all these circumstances often rule out contracts and trading of environmental services it is less known that the basic cause of market existence and extension namely specialization and division of labour have negative environmental effects with respect to environmental policy conceptual problems are analyzed while all kinds of environmental management mechanisms have a regulatory function only quantity mechanisms as a subset of incentive mechanisms are market mechanisms the choice of relevant environmental policy instrument is conditioned by many considerations the issue of the superior efficiency properties of market mechanisms in environmental management is not yet settled satisfactorily extensive empirical tests are still lacking

a tradable permit system in an intertemporal economy it is known that in an intertemporal competitive economy a tradable permit system may not achieve efficiency without setting appropriate permit interest rates i e rewards for holding permits to find the rates however we need to know in advance the path of efficient permit prices which is difficult to obtain this study intends to solve this problem in two ways first we analyze a special case in which the permit interest rates are given by a simple rule for example if the marginal abatement cost of pollution emission is constant then the appropriate rate is to equal the monetary interest rate as is the case for global warming if the damage is caused in the future far beyond the planning period of the environmental program the appropriate rate coincides with the marginal self recovery of environmental stock under certain conditions as a second approach we propose a tradable permit system with a permit bank as a mechanism by which the permit interest rates are generated endogenously without governmental intervention other than the issuance of permits however we also show that this approach raises the problem of indeterminacy of the equilibrium

designing more efficient markets lessons from los angeles smog control market based approaches for environmental protection are beginning to take root around the world this article attempts to improve our understanding of the performance of environmental markets by constructing and evaluating an information base on trades in los angeles which includes the first detailed data on trading prices the analysis suggests that trading activity has been shaped by the detailed regulations governing the market in addition transaction costs have played a crucial role we argue that the move toward adopting market based approaches for environmental protection needs to be accompanied by a vigorous effort to assess the properties of these systems as they are actually implemented

sorting and incentive effects of pay for performance an experimental investigation agency theory highlights losses in productivity that may occur when the interests of owners and employees are imperfectly aligned pay for performance has been proposed as a solution to this proble

performance of a cap and trade system for managing environmental impacts of shale gas surface infrastructure abstract governments across the globe are exploring ways to reduce the environmental and human health impacts created by shale energy production in active areas environmental regulations tend to be limited we apply established instruments to empirically estimated environmental impact abatement cost curves for the development of 56 sites in pennsylvania usa we compare the cost to industry of setting a cap on environmental impacts from land clearing and building of surface infrastructure under two regulations cap and trade versus a uniform inflexible regulation greatest differences in cost are achieved when firm level permits are allocated to reduce market wide potential impacts by 36 cap and trade achieved this cap at a cost of 0 05 of not developing and allowed all development to proceed the uniform inflexible regulation cost 32 of not developing for a similar outcome and prevented 18 of firms from developing cap and trade s performance depended on the regulator s ability to accurately allocate firm level permits that reflect developers options in extreme cases inaccurate allocations made cap and trade perform worse than other the approach we conclude that where developers differ in their ability and cost of minimizing impacts cap and trade should be explored as an inexpensive alternative to traditional approaches

marketable pollution permits and acid rain externalities a comment and some further evidence in a recent paper scott atkinson 1983 has provided some important insights into the design of systems of marketable permits for the control of air pollution atkinson reaches two major conclusions 1 a system of marketable permits that minimizes the control costs for the attainment of local ambient air quality standards for so2 is likely to increase significantly the extent of long range sulfate depositions acid rain as compared to a traditional command and control cac strategy 2 solely from the perspective of local air quality the cost minimizing system of marketable permits must imply higher levels of local pollution relative to an alternative system of emissions permits or to a prototype cac system we have no quibbles with the first point moreover atkinson s simulation results suggest that the trade off between local air pollution and the long range transport of sulfur is a serious issue this is largely a matter of stack height higher chimneys allow sulfur emissions to escape the local environment only to result in increased sulfate pollution at more distant locations this suggests that stack height must be treated as a critical variable in the design of systems to control jointly local and global pollution our concern in this note is with atkinson s second point we shall show first that the atkinson theorem is formally incorrect the cost minimizing permit system need not result in increased local pollution however as a practical matter atkinson may well be right we shall supplement his simulation results with some findings from another set of simulations for a different air pollutant particulate matter in the baltimore air quality control

externalities and corrective policies in experimental markets this paper reports on the behaviour of simple laboratory markets which have an externality experiences with these markets provide some help in answering two broad questions 1 do markets with externalities behave in accordance with the law of supply and demand 2 how do the pollution tax pollution standard and pollution licenses compare as methods for correcting the externality