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Fair and Efficient Compensation for Taking Property under Uncertainty




Existing mechanisms for managing eminent domain suggest that, when there is uncertainty about whether a government will take property, efficiency requires that the property owner receive at most partial compensation. We argue that announcing the possibility of a taking is itself a taking when this implies that further investments will not be compensated. We argue that it is both fair and efficient to require governments to compensate owners for losses in asset value from such announcements. We propose a mechanism that provides incentives for both efficient investment and efficient takings, while paying full compensation for expected losses under efficient behavior. Copyright 2005 Blackwell Publishing Inc..

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  • T. Nicolaus Tideman & Florenz Plassmann, 2005. "Fair and Efficient Compensation for Taking Property under Uncertainty," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(3), pages 471-495, August.
  • Handle: RePEc:bla:jpbect:v:7:y:2005:i:3:p:471-495

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    Cited by:

    1. Thomas J. Miceli & Kathleen Segerson, 2011. "Regulatory Takings," Working papers 2011-16, University of Connecticut, Department of Economics.
    2. Asaf Friedman Arch, 2014. "Sustainable Urban Renewal: The Tel Aviv Dilemma," Sustainability, MDPI, Open Access Journal, vol. 6(5), pages 1-11, April.
    3. Hans-Bernd Schäfer & Ram Singh, 2017. "Takings of Land by Self-interested Governments Economic Analysis of Eminent Domain," Working papers 281, Centre for Development Economics, Delhi School of Economics.
    4. Florenz Plassmann & T. Nicolaus Tideman, 2007. "Efficient Urban Renewal Without Takings: Two Solutions to the Land Assembly Problem," Working Papers e07-8, Virginia Polytechnic Institute and State University, Department of Economics.

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