Welfare improvement properties of an allowance market in a production economy.

This paper studies the welfare improvement properties of a market of allowances in an economy with a single type of externality. We show that thanks to the opening of such a market the Pareto optima can be decentralized as marginal pricing equilibria. However, the set of equilibria is much larger than this of Pareto optima. In order to discriminate the efficient equilibria we introduce a demand revealing mechanism tailored for this framework.

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Year of publication:	2007-05
Authors:	Mandel, Antoine
Institutions:	Centre d'Économie de la Sorbonne, Université Paris 1 (Panthéon-Sorbonne)
Subject:	General equilibrium theory \| Pareto Optimality \| externalities \| markets of allowances

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Extent:	application/pdf
Series:	Documents de travail du Centre d'Economie de la Sorbonne. - ISSN 1955-611X.
Type of publication:	Book / Working Paper
Notes:	13 pages
Classification:	D51 - Exchange and Production Economies ; D62 - Externalities ; Q54 - Climate; Natural Disasters ; Q58 - Government Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005797762