The land assembly problem revisited
As in the standard land assembly problem, a developer wants to buy two adjacent blocks of land belonging to two di¤erent owners. The value of the two blocks of land to the developer is greater than the sum of the individual values of the blocks for each owner. Unlike the land assembly literature, however, our focus is on the incentive that each lot owner has to delay the start of negotiations, rather than on the public goods nature of the problem. An incentive for delay exists, for example, when owners perceive that being last to sell will allow them to capture a larger share of the joint surplus from the development. We show that competition at point of sale can cause equilibrium delay, and that cooperation at point of sale will eliminate delay.
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- 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.
- Eckart, Wolfgang, 1985. "On the land assembly problem," Journal of Urban Economics, Elsevier, vol. 18(3), pages 364-378, November.
- O'Flaherty, Brendan, 1994. "Land assembly and urban renewal," Regional Science and Urban Economics, Elsevier, vol. 24(3), pages 287-300, June.
- Asami, Yasushi, 1985. "A game-theoretic approach to the division of profits from economic land development," Regional Science and Urban Economics, Elsevier, vol. 18(2), pages 233-246, May.
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