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.
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. Of course, you can still access the original instructions on this webpage.
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