Polution Permits: Efficiency by Design
Abstract:
The annual adverse effects of pollution are on the order of 10% of world GDP. Many approaches are used or have been proposed to control the growing pollution problem, but none of them allows for efficient pollution control in settings in which the marginal cost of pollution is increasing and polluters are better informed than regulators about the costs of abatement. We propose a simple primary market mechanism, True-Cost Pay as Bid, that implements efficient pollution control and does not depend on how much information the regulators have about the abatement costs.
Short bio:
Marek Pycia is the Professor of Organizational Economics at the University of Zurich and Co-Director of the Zurich Center for Market Design. His research led to the establishment of a kidney-transplant voucher program in the US and influenced the design of US school systems. The research has been published in leading international journals including the American Economic Review, Econometrica, the Journal of Political Economy, and the Review of Economic Studies, and it is supported by an ERC Consolidator Grant. Marek Pycia has served on the editorial boards of Theoretical Economics, the Journal of Economic Theory, the International Journal of Game Theory, the Journal of Mechanism and Institution Design, as well as Games and Economic Behavior, and he is a Research Fellow at the Centre for Economic Policy Research (CEPR). He worked at the University of California, Los Angeles, the Pennsylvania State University, and the Leon Koźmiński Academy of Entrepreneurship and Management. He holds a Ph.D. in Economics from the Massachusetts Institute of Technology.
The annual adverse effects of pollution are on the order of 10% of world GDP. Many approaches are used or have been proposed to control the growing pollution problem, but none of them allows for efficient pollution control in settings in which the marginal cost of pollution is increasing and polluters are better informed than regulators about the costs of abatement. We propose a simple primary market mechanism, True-Cost Pay as Bid, that implements efficient pollution control and does not depend on how much information the regulators have about the abatement costs.
Short bio:
Marek Pycia is the Professor of Organizational Economics at the University of Zurich and Co-Director of the Zurich Center for Market Design. His research led to the establishment of a kidney-transplant voucher program in the US and influenced the design of US school systems. The research has been published in leading international journals including the American Economic Review, Econometrica, the Journal of Political Economy, and the Review of Economic Studies, and it is supported by an ERC Consolidator Grant. Marek Pycia has served on the editorial boards of Theoretical Economics, the Journal of Economic Theory, the International Journal of Game Theory, the Journal of Mechanism and Institution Design, as well as Games and Economic Behavior, and he is a Research Fellow at the Centre for Economic Policy Research (CEPR). He worked at the University of California, Los Angeles, the Pennsylvania State University, and the Leon Koźmiński Academy of Entrepreneurship and Management. He holds a Ph.D. in Economics from the Massachusetts Institute of Technology.
Practical information
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Organizer
Contact
- Andrés Cristi