Marginal Cost Pricing and Efficient Taking under Uncertainty
We describe a mechanism for government taking under uncertainty that provides incentives for governments to make efficient taking decisions and for property owners to use their properties efficiently. We argue that efficiency in takings requires that governments not only pay the value of property when it is taken but also pay the reduction in property value that they cause when identifying properties as potential targets of takings. This is a straightforward application of the general principle of marginal cost pricing. Unlike existing proposals to improve the efficiency of takings, our mechanism requires governments to pay amounts that are sufficient to fully compensate property owners for their losses.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: 3016 Pamplin Hall, Blacksburg, VA 24061-0316|
Web page: http://www.econ.vt.edu
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:vpi:wpaper:e07-7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Djavad Salehi-Isfahani)
If references are entirely missing, you can add them using this form.