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The Problem Of Maintaining Compliance Within Stable Coalitions: Experimental Evidence, David M. Mcevoy, James J. Murphy, John M. Spraggon, John K. Stranlund
The Problem Of Maintaining Compliance Within Stable Coalitions: Experimental Evidence, David M. Mcevoy, James J. Murphy, John M. Spraggon, John K. Stranlund
John K. Stranlund
This study examines the performance of stable cooperative coalitions that form to provide a public good when coalition members have the opportunity to not comply with their commitments. A stable coalition is one in which no member wishes to leave and no non-member wishes to join. To counteract the incentive to violate their commitments, coalition members fund a third-party enforcer. This leads to the theoretical conclusion that stable coalitions are larger (and provide more of a public good) when their members must finance enforcement relative to when compliance is ensured without the need for costly enforcement. However, our experiments reveal …
Imperfect Enforcement Of Emissions Trading And Industry Welfare: A Laboratory Investigation, John K. Stranlund, James J. Murphy, John M. Spraggon
Imperfect Enforcement Of Emissions Trading And Industry Welfare: A Laboratory Investigation, John K. Stranlund, James J. Murphy, John M. Spraggon
John K. Stranlund
This paper uses laboratory experiments to investigate the performance of emission permit markets when compliance is imperfectly enforced. In particular we examine deviations in observed aggregate payoffs and expected penalties from those derived from a model of risk-neutral payoff-maximizing firms. We find that the experimental emissions markets were reasonably efficient at allocating individual emission control choices despite imperfect enforcement and significant noncompliance. However, violations and expected penalties were lower than predicted when these are predicted to be high, but were about the same as predicted values when these values were predicted to be low. Thus, although a standard model of …