The land assembly problem revisited

Menezes, F. and Pitchford, R. (2004) The land assembly problem revisited. Regional Science and Urban Economics, 34 2: 155-162. doi:10.1016/S0166-0462(03)00041-3

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Author Menezes, F.
Pitchford, R.
Title The land assembly problem revisited
Journal name Regional Science and Urban Economics   Check publisher's open access policy
ISSN 0166-0462
0034-3331
Publication date 2004-03
Year available 2003
Sub-type Article (original research)
DOI 10.1016/S0166-0462(03)00041-3
Volume 34
Issue 2
Start page 155
End page 162
Total pages 8
Editor D. McMillin
Y. Zenou
Place of publication Amsterdam, The Netherlands
Publisher Elsevier BV, North-Holland
Language eng
Subject 140218 Urban and Regional Economics
1402 Applied Economics
Abstract As in the standard land assembly problem, a developer wants to buy two adjacent blocks of land belonging to two different owners. The value of the two blocks of land to the developer is greater than the sum of the individual values of the blocks for each owner. Unlike the land assembly literature, however, our focus is on the incentive that each lot owner has to delay the start of negotiations, rather than on the public goods nature of the problem. An incentive for delay exists, for example, when owners perceive that being last to sell will allow them to capture a larger share of the joint surplus from the development. We show that competition at point of sale can cause equilibrium delay, and that cooperation at point of sale will eliminate delay. This suggests that strategic delay is another source for the inefficient allocation of land, in addition to the public-good type externality pointed out by Grossman and Hart [Bell Journal of Economics 11 (1980) 42] and O'Flaherty [Regional Science and Urban Economics 24 (1994) 287]. (C) 2004 Elsevier B.V. All rights reserved.
Keyword Economics
Environmental studies
Urban studies
Land assembly
Coordination
Inefficient delay
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
School of Economics Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 14 times in Thomson Reuters Web of Science Article | Citations
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Created: Mon, 13 Aug 2007, 14:11:22 EST