Research On The Combinatorial Auction Mechanism For Initial Emission Permits And The Bidders' Behavior

In recent years,the problem of pollution has become a hot topic,how to control the discharge of pollutants and to maintain sustainable economic development has become China's urgent problems to be solved.Among various governance methods,the emission trading system has been widely used in the western countries because of its low cost of governance and high efficiency.However,China's emission trading is still at the exploration stage,and the mechanism design of the system still needs to be improved.When designing the mechanism,the design of initial emission permits allocation mechanism is very important because itdirectly affects the result of the system.In the three main distribution methods,auction has the function of price discovery and canallocate social resources reasonably,so it's a relatively fair and reasonable way to distribute initial emission permits.Considering that the design of the auction mechanism will directly affect the allocation efficiency of the initial emission permits and the effectiveness of the emissions trading mechanism,we study the auction mechanism of initial emission permits.In real life,enterprises discharge several types of pollutants in the production process,so different types of emission permits are complements for them.Among all the auction mechanisms,combinatorial auction allows bidders to bid for a package of emission permits according to their actual needs.Under this circumstance,enterprises can express their own preference better,and this mechanism can reduce the transaction costs and improve the distribution efficiency.Therefore,combinatorial auction is a relative reasonable mechanism to allocate emission permits.However,few scholars have researched the combinatorial auction mechanism of initial emission permits.Based on this,this paper studies the design of combinatorial auction mechanism of initial emission permits.At the same time,as the most important participants in the auction of initial emission permits,bidding enterprises' bidding behavior directly affects the auction efficiency.Therefore,the research on the bidding behavior of bidding enterprises is an important part of the research of combinatorial auction mechanism.The traditional auction theory is often based on the premise of rational hypothesis,but in the reality,bidders have the characteristics of bounded rationality,their bidding behavior may be influenced by their rational degree,resource endowment,risk appetite,learning ability and external environmental factors,etc.Therefore,this paper explores the evolution characteristics of bidding enterprises'bidding strategy and the influencing factors of the auction results in the initial emission permits auction based on the theories of economics,cognitive psychology and game theory.In addition,the coalition behavior of enterprises in the auction will influence the interests of the government and other enterprises,so we need to design a reasonable mechanism to prevent this kind of behavior.Therefore,this article further explores the influencing factors of collusion from the perspective of cognitive psychology.According to the above analysis,this paper takes the auction mechanism of the initial emission permits and the bidding behavior of the enterprises in the auction as the research object,and discusses the influences of risk aversion,loss aversion,cognitive confidence,psychological distance,information feedback,information frame and other factors on the enterprise bidding behavior and auction results from the perspective of designer based on auction theory,game theory and cognitive psychology.And on this basis,the paper aims to put forward an initial mechanism of emission combinatorial auction.It should be noted that China's emissions trading mechanism is still in development,the initial emissions trading transaction data is difficult to obtain.Therefore,this paper is mainly built on mathematical modeling,experimental economics and simulation methods to study the enterprise's bidding behavior.In the future,with the development of emissions trading market,we will be able to get enough data in the case of relevant empirical research.This paper is mainly about:(1)From the aspects of individual preference and psychological factors,this paper introduces the characteristics of risk aversion and loss aversion in the relationship between the individual attributes of the bidding enterprise and its bidding strategy combined with the theory and prospect theory of economics.In the utility function,the optimal bidding strategy of the enterprise under the "local-local-global"(LLG)framework is studied by means of mathematical modeling,and the model is extended to the case of multiple bidding enterprises.The results of the model derivation show that the bid strategy of the local bidders will be affected by its real valuation of the emission permits,the valuation of the competitors,the starting price of the emission permits,the degree of enterprise risk aversion and the degree of loss aversion.And in other conditions with the same case,the bidders who avoid loss are more likely to take a real quotation strategy when the valuation of the emission permits is low compared to the local bidders who do not have the loss avoidance.(2)In the relationship between external environment information and enterprise bidding strategy,this paper mainly uses the method of economic experiment to discuss the influence of information feedback on the bidding result in the auction of initial emission permits.In the experimental design of this paper,auction information is divided into three categories:price information,demand and supply information and information distribution.At the same time,in order to avoid the impact of different sizes of the group,we set up three-people groups and six-people groups.The experimental results show that the feedback of demand and supply information can improve the efficiency of the auction in the combination of the emission permits,and more increase in the total surplus of the society brought by the improvement of auction efficiency is allocated to the bidding enterprises.However,the feedback of the results of information does not contribute to the improvement of auction efficiency.Therefore,it is observed that in the initial emissions trading mechanism,we need to design appropriate information feedback mechanism to avoid too much information be on the bidding business interference.(3)On the basis of(1)and(2),this paper further discusses the basic attributes of enterprises,interactive learning behavior and the impact of auction market competition on corporate bidding strategies and auction results.The simulation results show that:(a)the existence of stubborn bidding enterprises will lead to the reduction of auction efficiency.At the same time,if the change rate of enterprise attribute is relatively small,the effect of attribute dynamic on auction results will become insignificant;(b)the stronger the firm's ability to learn,the more likely he is to choose the optimal strategy in the bidding process,and the auction proceeds will be higher than those with weak learning ability;(c)lack of competition or excessive competition may lead to overall auction efficiency decline.Under the appropriate degree of market competition,the enterprise is more likely to choose the real bidding strategy.(4)At the level of corporate collusion,this paper constructs a one-time game model by introducing trust cognitive parameters from the perspective of cognitive psychology.The model results show that the trust cognition among participating enterprises will have an impact on its strategy choice.The lower the cognitive confidence in its competitors,the lower probability of a conspiracy strategy.On the basis of that,this paper builds the economic experiment to explore the influence of the information frame and the social distance on the collusion behavior by combining the prospect theory and the construal level theory.The experimental results show that,the possibility of conspiracy is higher in giving framework;and the collusion is more likely to happen in closer social distance.At the same time,the significance of the framing effect decreases when the social distance is closer.From the level of the explanation,this is due to the difference of the psychological processing mode adopted by the enterprise under different psychological distance.(5)In the design of the initial emission permit auction mechanism,considering that different pollutant emission permits quota for enterprises is complementary,the aim of this paper's auction mechanism is to reduce the cost of social emission reduction.Specifically,the combinatorial auction includes two stages,the clock auction stage and the package bidding stage.The clock auction stage has the function of price discovery,through this stage of the tender,the enterprise can get price information of their target portfolio price,which will help enterprises to make better decisions and help to improve the efficiency of the auction;in the package bidding stage,the enterprisesbid based on information of the previous stage.The auctioneer calculate the optimal allocationand the winners' payment based on his own goal.The research of this paper will help us understand the bidding behavior of the limited rational enterprises in the auction of initial emission permits better.The relevant research conclusions can provide theoretical reference for the government to design and improve the initial emission permit distribution mechanism.