Harstad, Bård; Eskeland, Gunnar S. - In: Journal of Public Economics 94 (2010) 9-10, pp. 749-760
Permit markets are celebrated as a policy instrument since they allow (i) firms to equalize marginal costs through trade and (ii) the regulator to distribute the burden in a politically desirable way. These two concerns, however, may conflict in a dynamic setting. Anticipating the regulator's...