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Private takings

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  • Alessandro Marchesiani
  • Ed Nosal

Abstract

This paper considers the implications associated with a recent Supreme Court ruling that can be interpreted as supporting the use of eminent domain in transferring the property rights of one private agent?a landowner?to another private agent?a developer. Compared to voluntary exchange, when property rights are transferred via eminent domain, landowners? investments in their properties become more inefficient and, as a result, any benefit associated with mitigating the holdout problem between landowners and the developer is reduced. Social welfare can only increase if the holdout problem is significant; otherwise, social welfare will fall when property rights are transferred via eminent domain.
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Suggested Citation

  • Alessandro Marchesiani & Ed Nosal, 2017. "Private takings," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(3), pages 639-657, June.
    • Handle: RePEc:bla:jpbect:v:19:y:2017:i:3:p:639-657
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    File URL: http://hdl.handle.net/10.1111/jpet.2017.19.issue-3
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    References listed on IDEAS

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    1. Nosal, Ed, 2001. "The taking of land: market value compensation should be paid," Journal of Public Economics, Elsevier, vol. 82(3), pages 431-443, December.
    2. Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
    3. Thomas A. Garrett & Paul Rothstein, 2007. "The taking of prosperity? Kelo vs. New London and the economics of eminent domain," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jan, pages 4-9.
    4. Lawrence Blume & Daniel L. Rubinfeld & Perry Shapiro, 1984. "The Taking of Land: When Should Compensation Be Paid?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(1), pages 71-92.
    5. Munch, Patricia, 1976. "An Economic Analysis of Eminent Domain," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 473-497, June.
    6. Hermalin, Benjamin E, 1995. "An Economic Analysis of Takings," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 64-86, April.
    7. Eckart, Wolfgang, 1985. "On the land assembly problem," Journal of Urban Economics, Elsevier, vol. 18(3), pages 364-378, November.
    8. Rohan Pitchford, 2003. "Coming to the Nuisance: An Economic Analysis from an Incomplete Contracts Perspective," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(2), pages 491-516, October.
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    Cited by:

    1. Cadigan, John & Schmitt, Pamela & Shupp, Robert & Swope, Kurtis, 2011. "The holdout problem and urban sprawl: Experimental evidence," Journal of Urban Economics, Elsevier, vol. 69(1), pages 72-81, January.
    2. John Cadigan & Pamela Schmitt & Robert Shupp & Kurtis Swope, 2009. "An Experimental Study of the Holdout Problem in a Multilateral Bargaining Game," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 444-457, October.
    3. Chris Cunningham, 2013. "Estimating the holdout problem in land assembly," FRB Atlanta Working Paper 2013-19, Federal Reserve Bank of Atlanta.
    4. Grossman, Zachary & Pincus, Jonathan & Shapiro, Perry & Yengin, Duygu, 2019. "Second-best mechanisms for land assembly and hold-out problems," Journal of Public Economics, Elsevier, vol. 175(C), pages 1-16.
    5. Kurtis Swope & Ryan Wielgus & Pamela Schmitt & John Cadigan, 2011. "Contracts, Behavior, and the Land-assembly Problem: An Experimental Study," Research in Experimental Economics, in: Experiments on Energy, the Environment, and Sustainability, pages 151-180, Emerald Group Publishing Limited.
    6. Usha Sridhar & Sridhar Mandyam, 2013. "A Group Utility Maximizer Mechanism for Land Assembly," The Journal of Real Estate Finance and Economics, Springer, vol. 47(3), pages 466-488, October.
    7. Randall Wright & Yuet‐Yee Wong, 2014. "Buyers, Sellers, And Middlemen: Variations On Search‐Theoretic Themes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(2), pages 375-397, May.
    8. Yu Zhu, 2019. "A Note on Simple Strategic Bargaining for Models of Money or Credit," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 739-754, March.

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    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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