Is trading with emissions a repugnance market? Theory and experiment
Social attitudes about emission trading can affect participation and behavior in the emission trading market. This research will use experimental economic methods in a laboratory setting to investigate the attributes associated with emission allowances as the commodity of exchange in the market. In particular, drawing on media attention in 2006 around free allocation, the research will examine how public perceptions are affected by the approach to the initial distribution of emission allowances. If the commodity or if the design of the trading program including free allocation is viewed as repugnant, then we conjecture that the tradable emission market may be perceived as inappropriate and unfair.
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