Revolutionizing Environmental Funding: Combining Forces for Greener Future
The article discusses how combinatorial auctions can be used to allocate public financial support for environmental protection. The researchers conducted economic lab experiments to test this model on providing capital investment subsidies to polluters. Combinatorial auctions allow bidders to bid on combinations of items, which helps them express their preferences more fully, especially when items are complements. In the experiment, polluters could choose to invest individually or form coalitions to work on joint projects. The results of the experiments show how this auction model can be effective in allocating financial support in the environmental sector.