HAMAGUCHI Yasuyo/MITANI Satoshi/SAIJO Tatsuyoshi (Faculty Fellow)
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.