Permit Market Game

The story

Your team runs a firm that must hold a permit for every unit it emits. Whatever you cannot cover with permits, you must abate, and abatement gets more expensive with every unit. The regulator sells a fixed number of permits at auction, then opens a market where firms trade with each other. Cheap abaters should end up selling to expensive abaters; whether that happens is up to you.

Online game links

• Student login: Permit Market Student Portal
• Admin login (instructor): Permit Market Admin Dashboard

How we will play

• Each team joins with a team name (one browser per team) and is assigned a firm: baseline emissions and a marginal abatement cost schedule. Your page shows exactly what each permit is worth to your firm. Keep it private.
• The game runs two rounds, each with two timed phases:
  1. A sealed-bid auction, then
  2. An open trading market.
• Round 2 repeats everything with a much tighter cap. If banking is on, permits you do not use in round 1 carry into round 2.

The auction

Submit up to four price/quantity bids before the clock runs out. All bids are stacked from the highest price down and the top bids win until the permits run out. Everyone pays the same price: the lowest accepted bid. Think about what this pricing rule means for how honestly you should bid. Real allowance auctions (RGGI, the EU ETS) use exactly this design.

The market

After the auction clears you see the price, your allocation, and a live order book. Post a buy or sell order at any price; if it crosses an order on the other side it trades immediately at the resting order’s price, otherwise it waits in the book. You can cancel open orders. You cannot sell permits you do not hold.

Your page shows your live position: permits held, what you can still sell, and what your round score would be if the market closed right now.

Scoring

Round score = avoided abatement cost - auction spending - net market spending. The leaderboard ranks teams by how far they beat an efficiency benchmark computed for their own firm type, so a lucky firm assignment does not decide the winner. Watch for the debrief chart comparing the class’s bids to the true demand curve.

Notes for students

• Keep your team page open; phases and timers update automatically.
• Bids and orders lock when a phase’s countdown hits zero.
• Overbuying is allowed but hurts: permits beyond your baseline are worthless unless banking carries them forward.