beandeau>
Designing markets for bundled environmental goods
Ben Balmford  1@  
1 : Economics Department, University of Exeter

How to efficiently organise the exchange of environmental goods and services between multiple buyers and sellers? The global market for environmental goods is ever growing and already a multi-billion dollar industry. Yet, the mechanisms through which trades currently occur are poorly organised and highly-inefficient. Such inefficiency stems from the package nature of supply and demand for environmental services, which has yet to be recognised by existing market designs. In this paper we propose and test, both in the real world and laboratory, a package market using the Balanced Winners' Contribution rule of Lindsay (2018). Proprietary data from the real world shows that the package market design can facilitate trade where current approaches fail. The experimental results point to this new market design offering substantial efficiency gains relative to the
current approaches applied internationally. This suggests that the real world result is likely to generalise, and is underpinned by the package market alleviating exposure risk.


Loading... Loading...