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Bargaining for Value Capturing: A Game-Theoretical Analysis and Experimental Approach

Author

Listed:
  • D Ary A Samsura

    (Department of Spatial Planning, Nijmegen School of Management, Radboud University Nijmegen, PO Box 9108, 6500 HK, Nijmegen, The Netherlands)

  • A M A van Deemen

    (Department of Strategy and Marketing, Nijmegen School of Management, Radboud University Nijmegen, Nijmegen, The Netherlands)

  • Erwin van der Krabben
  • R E C M van der Heijden

Abstract

Value capturing is considered a promising additional way of funding public infrastructure development. However, its implementation is often problematic because the instruments that can be used for it (ie, taxes, fees, and other types of fiscal regulation) generally face a lack of support. An alternative approach to value capturing might be to stimulate the stakeholders to bargain over the distribution of the increment values. This paper presents an analysis of bargaining processes with respect to the implementation of value capturing based on concepts drawn from cooperative game theory in partition function form. The institutional setting of location development related to infrastructure development in the Netherlands is used to provide an empirical context to the analysis. As a validation, the game is played with experts in Dutch planning and infrastructure development practice. Our study shows that a game-theoretical approach offers a useful method to conceptualise relationships between different stakeholders and analyse the bargaining and negotiation processes to reach an agreement about an efficient and fair allocation of the increment land values.

Suggested Citation

  • D Ary A Samsura & A M A van Deemen & Erwin van der Krabben & R E C M van der Heijden, 2013. "Bargaining for Value Capturing: A Game-Theoretical Analysis and Experimental Approach," Environment and Planning B, , vol. 40(2), pages 234-253, April.
    • Handle: RePEc:sae:envirb:v:40:y:2013:i:2:p:234-253
    DOI: 10.1068/b37156
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    References listed on IDEAS

    as
    1. Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
    2. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, December.
    3. H. William Batt, 2001. "Value Capture as a Policy Tool in Transportation Economics: An Exploration in Public Finance in the Tradition of Henry George," American Journal of Economics and Sociology, Wiley Blackwell, vol. 60(1), pages 195-228, January.
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