Does the Varian Mechanism Work?
-Emissions Trading as an Example

Author Name HAMAGUCHI Yasuyo/MITANI Satoshi/SAIJO Tatsuyoshi  (Faculty Fellow)
Creation Date/NO. February 2004 04-E-009
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This paper investigates whether Varian's (1994) compensation mechanism can work in a laboratory. The results show that this mechanism does not work as in the theory. We found that the magnitude of penalties crucially affects subjects' behavior.

Published: Yasuyo Hamaguchi, Satoshi Mitani and Tatsuyoshi Saijo, 2003. "Does the Varian Mechanism Work?: Emissions Trading as an Example," International Journal of Business and Economics, Vol. 2(2), pp. 85-96.