In this paper we advocate a new initial allocation mechanism for a tradable pollution permit market. We outline a Permit Allocation Contest (PAC) that distributes permits to firms based on their rank relative to other firms. This ranking is achieved by ordering firms based on an observable...

In this paper we advocate a new initial allocation mechanism for a tradable pollution permit market. We outline a Permit Allocation Contest (PAC) that distributes permits to firms based on their rank relative to other firms. This ranking is achieved by ordering firms based on an observable...

In this paper we advocate a new initial allocation mechanism for a tradable pollution permit market. We outline a Permit Allocation Contest (PAC) that distributes permits to firms based on their rank relative to other firms. This ranking is achieved by ordering firms based on an observable...

The establishment of a tradable permit market requires the regulator to select a level of aggregate emissions and then distribute the associated permits (rent) to specific groups. In most circumstances, these decisions are often politically contentious and frequently influenced by rent seeking...

This paper considers the effects of changes in the income distribution in an economy where agents’ utility depends both on consumption and on their rank in the distribution of consumption of a positional good. We introduce a new methodology to compare the behavior of agents that occupy the...

This paper considers the effect of inequality when there are concerns for status. We analyse the effects of linear redistributive taxes in an economy where agents’ utility depends both on consumption and on their rank in the distribution of consumption of a positional good. This increase in...

This paper analyses comparative statics for first price auctions and all pay auctions with independent private values. In all pay auctions, bidders with low values will respond to a stochastically higher (in the sense of likelihood ratio dominance) distribution of types by playing less...

Society often allocates valuable resources - such as prestigious positions, salaries, or marriage partners - via tournament-like institutions. In such situations, inequality affects incentives to compete and hence has a direct effect on equilibrium choices and hence material outcomes. We...

Monotone ratio orderings are refinements of first order stochastic dominance that allow monotone comparative statics results in games of incomplete information. We develop analogous refinements for second order stochastic dominance based on the monotonicity of the cumulative probability ratio...