Resource Allocation with Spatial Externalities: Experiments on Land Consolidation

Tomomi Tanaka
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Tomomi Tanaka: California Institute of Technology

The B.E. Journal of Economic Analysis & Policy, 2007, vol. 7, issue 1

Abstract: This paper compares the performance of a two-sided combinatorial call market, direct negotiation, and double auction for consolidating fragmented land. Experimental results suggest direct negotiation produces higher efficiencies than other mechanisms. The combinatorial call market tends to alleviate the exposure problem, and 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, however, suffers from the holdout problem when the number of subjects and commodities is small.

Keywords: mechanism design; two-sided combinatorial auction; holdout (search for similar items in EconPapers)
JEL-codes: C92 (search for similar items in EconPapers)
Date: 2007
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