Price Desclosure, Marginal Abatement Cost Information and Market Power in a Bilateral GHG Emissions Trading Experiment.

Abstract

We conducted an experiment to examine the performance of the bilateral trading institution in GHG emissions trading. First, we found that the efficiency of bilateral trading is quite high, regardless of the disclosure or closure of contracted price and/or marginal abatement cost curve information. Second, marginal abatement costs are equalized over time. Third, on the other hand, contracted prices did not converge to the competitive price over time. Fourth, subjects who had market power did not use it.TRADE ; PRICES ; COSTS ; COMPETITION