Market Power in Pollution Permit Markets

@inproceedings{Montero2009MarketPI,
  title={Market Power in Pollution Permit Markets},
  author={Juan-Pablo Montero},
  year={2009}
}
As with other commodity markets, markets for trading pollution permits have not been immune to market power concerns. In this paper, I survey the existing literature on market power in permit trading but also contribute with some new results and ideas. I start the survey with Hahn’s (1984) dominant-firm (static) model that I then extend to the case in which there are two or more strategic firms that may also strategically interact in the output market, to the case in which current permits can… CONTINUE READING