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Limited Developers


  • Robert W. Helsley
  • William C. Strange


This paper considers the role of developers in the formation of cities. Existing treatment of the location of economic activity between cities either ignore developers entirely (e.g. Stiglitz 1977) or endow them with limitless power (e.g., Henderson 1988). Reality lies somewhere in between; most cities have been partly shaped by the actions of developers, but even the largest developers are limited. In this paper organizational limits to developers are discussed, and a model of a system of cities is presented in which a land assembly problem may prevent developers from acquiring efficient amounts of land. We examine the consequences of land assembly for land prices, city sizes, and infrastructure provision. We show that limited developers may not attain an efficient allocation of resources.

Suggested Citation

  • Robert W. Helsley & William C. Strange, 1997. "Limited Developers," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 329-348, May.
  • Handle: RePEc:cje:issued:v:30:y:1997:i:2:p:329-48

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    Cited by:

    1. Henkel, Joachim & Stahl, Konrad & Walz, Uwe, 2000. "Coalition Building in a Spatial Economy," Journal of Urban Economics, Elsevier, vol. 47(1), pages 136-163, January.
    2. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    3. Gilles Duranton & Diego Puga, 2000. "Diversity and Specialisation in Cities: Why, Where and When Does it Matter?," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 533-555, March.
    4. Duranton, Gilles & Puga, Diego, 2005. "From sectoral to functional urban specialisation," Journal of Urban Economics, Elsevier, vol. 57(2), pages 343-370, March.
    5. Combes, Pierre-Philippe & Duranton, Gilles & Overman, Henry G., 2005. "Agglomeration and the adjustment of the spatial economy," LSE Research Online Documents on Economics 675, London School of Economics and Political Science, LSE Library.
    6. Miceli, Thomas J. & Sirmans, C.F., 2007. "The holdout problem, urban sprawl, and eminent domain," Journal of Housing Economics, Elsevier, vol. 16(3-4), pages 309-319, November.
    7. Konishi, Hideo, 2013. "Entrepreneurial land developers: Joint production, local externalities, and mixed housing developments," Journal of Urban Economics, Elsevier, vol. 75(C), pages 68-79.
    8. Massimo Del Gatto, 2004. "Agglomeration, Integration, and Territorial Authority Scale in a System of Trading Cities. Centralisation versus Devolution," Working Papers 2004.93, Fondazione Eni Enrico Mattei.
    9. Parente, Michael D. & Winn, Abel M., 2012. "Bargaining behavior and the tragedy of the anticommons," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 475-490.
    10. Andrew F. Haughwout & Robert P. Inman, 2004. "How should suburbs help their central cities?," Staff Reports 186, Federal Reserve Bank of New York.
    11. Leon Taylor, 1998. "When will the developer pay an impact fee?," Public Economics 9810004, EconWPA, revised 19 Apr 2003.
    12. Martin F. Quaas & Sjak Smulders, 2012. "Brown Growth, Green Growth, and the Efficiency of Urbanization," CESifo Working Paper Series 4044, CESifo Group Munich.
    13. Martin F. Quaas & Sjak Smulders, 2008. "Pollution and the Efficiency of Urban Growth," Working Papers 2008.75, Fondazione Eni Enrico Mattei.

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