Mechanism design and Bayesian game model of tradable pollution emission permits

It is being an effective policy of pollution emission permits management in the world to establish tradable pollution emission permits mechanism, which can achieve the optimization allocation of environment resources. Based on the market norm of double auction, this paper studies two kinds of bilateral trade models in the secondary market of pollution emission permits trade. i.e. the bilateral trade with only one buyer and only one seller, and the bilateral trade with many buyers and many sellers. On the one hand, for the bilateral trade with only one buyer and only one seller, a Bayesian game model of tradable emission permits is established. By solving Bayesian Nash equilibrium, the equilibrium bidding strategies of the bargainers are obtained. On the other hand, the bilateral trade with many buyers and many sellers is studied, and a mechanism design of pollution emission permits bilateral auction is given, including auction rule and market clearing rule.