We conduct an experimental analysis of a best-of-three contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of...

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,...

We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The...

We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The...

In the European Union Emissions Trading Scheme, the supply of carbon permits is determined in a decentralized manner by the Member States. Alternatively, the supply could be determined by the EU central authority. We analyze whether decentralization leads to lower total abatement costs under...

Links between emission trading programs are not immutable, as highlighted by New Jersey's exit from the Regional Greenhouse Gas Initiative. This raises the question of what to do with existing permits that are banked for future use -- choices that have consequences for market behavior in advance...

Many contests feature a best-of-N structure. We focus on best-of-three contests between equally-skilled players. Using a general symmetric contest success function, we determine the relationship between the players' efforts in the various rounds. These results imply that the contests are more...

We determine the change in air pollution damages from U.S. power plant emissions over 2010 to 2017. Annual damages fell from $245 billion to $133 billion over this period, with most of the decline occurring in the East. Decomposition shows that changes in emissions rates reduced damages by $63...

We extend the tax versus permits literature by considering permit supply functions and pollution tax functions that are generalizations of the usual constant permit supply and constant pollution tax rate. In our model, pollution is not uniformly mixed and the regulator is uncertain about the...

Italy is not Greece, but it faces considerable financial challenges in the coming years. Although we find that the Italian debt stock is quite conducive to a restructuring via local law, the lessons learned from Greece caution against taking drastic action now that would compromise Italy's...