The Coal Market. Pollution, Taxes and Permits

An experiment from the book Experiments with Economic Principles by Theodore C. Bergstrom, Marcus Giamattei, Humberto Llavador and John H. Miller. The experiment and warm-up exercises are located in the econ-class experiments folder within classEx,

In this experiment, students experience the effects of a negative externality, and explore how an appropriately chosen tax or a fix supply of marketable pollution permits may recover efficiency.

NEW VERSION IN EXPERIENCING ECONOMICS

We have an UPDATED VERSION of the instructions in Experiencing Economics: Pollution, Taxes, and Permits. The new version includes instructions for both online and offline trading. You can still access the original instructions on this webpage, but be aware that the experiment in classEx follows the instructions in Experiencing Economics.

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