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Resource allocation with spatial externalities: Experiments on land consolidation


  • Tomomi Tanaka

    (California Institute of Technology)


This paper compares the performance of direct negotiation, double auction, and a two-sided combinatorial call market for consolidating fragmented land. Experimental results suggest direct negotiation produces higher efficiencies than other mechanisms when 1) all commodities need to be traded to achieve efficiency, and 2) subjects are well exposed to various experimental formats. The combinatorial call market performs well when 1) swapping is easily agreeable, and 2) the number of subjects and commodities are increased and the initial endowments are unchallenging. The two-sided combinatorial call market suffers from the holdout problem when the number of subjects and commodities is small.

Suggested Citation

  • Tomomi Tanaka, 2005. "Resource allocation with spatial externalities: Experiments on land consolidation," Experimental 0511004, EconWPA.
  • Handle: RePEc:wpa:wuwpex:0511004
    Note: Type of Document - pdf; pages: 34

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    References listed on IDEAS

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    Cited by:

    1. Ali,Daniel Ayalew & Deininger,Klaus W. & Ronchi,Loraine, 2015. "Costs and benefits of land fragmentation : evidence from Rwanda," Policy Research Working Paper Series 7290, The World Bank.
    2. Klaus Deininger & Daniel Monchuk & Hari K Nagarajan & Sudhir K Singh, 2017. "Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 53(1), pages 82-98, January.
    3. Cadigan, John & Schmitt, Pamela & Shupp, Robert & Swope, Kurtis, 2011. "The holdout problem and urban sprawl: Experimental evidence," Journal of Urban Economics, Elsevier, vol. 69(1), pages 72-81, January.
    4. John Cadigan & Pamela Schmitt & Robert Shupp & Kurtis Swope1, 2009. "An Experimental Study of the Holdout Problem in a Multilateral Bargaining Game," Southern Economic Journal, Southern Economic Association, vol. 76(2), pages 344-457, October.
    5. Simanti Banerjee & Anthony Kwasnica & James Shortle, 2015. "Information and Auction Performance: A Laboratory Study of Conservation Auctions for Spatially Contiguous Land Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 409-431, July.
    6. Deininger, Klaus & Savastano, Sara & Carletto, Calogero, 2012. "Land Fragmentation, Cropland Abandonment, and Land Market Operation in Albania," World Development, Elsevier, vol. 40(10), pages 2108-2122.
    7. Swope, Kurtis J. & Cadigan, John & Schmitt, Pamela, 2014. "That's my final offer! Bargaining behavior with costly delay and credible commitment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 49(C), pages 44-53.

    More about this item


    Mechanism design; Two-sided combinatorial auction; Holdout;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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