Interdependent Value Multi-unit Auctions for Initial Allocation of Emission Permits

• DOI: 10.1016/j.proenv.2016.02.080
• Publication Date: 2016-04-29T19:38:19Z
• Authors: Ya-juan Wang; Xian-jia Wang
• Keywords: Private information retrieval; Mechanism Design; Value (mathematics); Externality; Marginal value

Auctions have been shown to be able tackle the efficient allocation of initial emission permits, but most existing works only consider problem with private values. They can not deal information externalities that each polluter's value depends on his own as well other polluters. In this paper, we model permits a multi-unit auction interdependent values and propose mechanism. First, give assumptions, i.e., polluter is allowed submit series marginal functions which are declining in number units allocated, signal independent interdependent. Second, establish designing for mechanism according above assumptions. Third, get by solving detail steps show how implement practice. Finally, an application example operability proposed paper. The conclusion drawn our prevent polluters from cheating auction, achieve social welfare optimization, provide environmental management departments theoretical basis reference methods realize fairness effectiveness permits.