Land Development Restrictions and Preemptive Action- On the benefits of differentiated regulation
We address the problem of preemptive land development to avoid future regulation. We demonstrate that differentiated treatment of landowners is generally essential to optimally deal with preemption. While differentiated policies improve welfare, they require the regulator to be informed about landowners' types. We use a mechanism design approach to deal with the case of asymmetric information. We show how a differentiated treatment of landowners is still feasible and beneficial. Our mechanism allows some landowners to face less stringent future regulation levels against a payment that is made ex ante or is anticipated ex ante. More generally, agents (landowners) may voluntarily commit to more stringent regulation if this gives them more leniency earlier or later. Our paper thereby shows the advantages of allowing such trade-offs by linking regulation across multiple periods.
(This abstract was borrowed from another version of this item.)
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- Langpap, Christian, 2006. "Conservation of endangered species: Can incentives work for private landowners?," Ecological Economics, Elsevier, vol. 57(4), pages 558-572, June.
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- Innes, Robert, 1997. "Takings, Compensation, and Equal Treatment for Owners of Developed and Undeveloped Property," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 403-432, October.
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- Miceli, Thomas J & Segerson, Kathleen, 1994. "Regulatory Takings: When Should Compensation Be Paid?," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 749-776, June.
- Daniel Rondeau & Erwin Bulte, 2007. "Wildlife Damage and Agriculture: A Dynamic Analysis of Compensation Schemes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 490-507.
- Lueck, Dean & Michael, Jeffrey A, 2003. "Preemptive Habitat Destruction under the Endangered Species Act," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 27-60, April.
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