The Design, Testing and Implementation of Virginia's NOx Allowance Auction
We report on the design and testing of three auction mechanisms to maximize revenue and efficiency in the sale of two vintages of nitrous oxide emission allowances by the Commonwealth of Virginia in 2004. The three mechanisms considered were a combinatorial sealed bid (CSB) auction, a sequential English clock (SEC) auction, and a combinatorial English clock (CEC) auction. We find the SEC and CEC mechanisms to be superior the CSB when demand is relatively elastic.
Porter, D., Rassenti, S., Shobe, W., Smith, V., and Winn, A. "The Design, Testing and Implementation of Virginia's NOx Allowance Auction." Journal of Economic Behavior and Organization, 69, pp. 190-200, February, 2009.
This article was originally published in Journal of Economic Behavior & Organization, volume 69, in 2009. doi: 10.1016/j.jebo.2007.09.007