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| Andrew Yates and Daniel English |
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| ''Citizens' demand for permits and Kwerel''s incentive compatible mechanism for pollution control'' |
| ( 2007, Vol. 17 No.4 ) |
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| An interesting feature of pollution permit markets is that citizens may purchase permits to directly lower the levels of pollution. Kwerel's mechanism (Review of Economic Studies~1977) is not incentive compatible when citizens demand permits. We show that a modification of Kwerel''s mechainism, the minimum-price mechanism, is incentive compatible when citizens demand permits, even in the case where there is uncertainty about the damages from pollution. |
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| Keywords: |
JEL: Q2 - Renewable Resources and Conservation: General
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| Manuscript Received : Jan 24 2007 | | Manuscript Accepted : Feb 01 2007 |
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