Free Riders, Holdouts, and Public Use: A Tale of Two Externalities

Thomas Miceli ()

No 2009-01, Working papers from University of Connecticut, Department of Economics

Abstract: Free riders and holdouts are market failures that potentially impede the completion of otherwise beneficial transactions. The key difference is that the free rider problem is a demand side externality that requires taxation to compel payment for a public good, while the holdout problem is a supply side externality that requires eminent domain to force the sale of land for large scale projects. This paper highlights that distinction between these two problems and uses the resulting insights to clarify the meaning of the public use requirement of the Fifth Amendment takings clause.

Keywords: Eminent domain; free riders; holdouts; public use; takings (search for similar items in EconPapers)
JEL-codes: H41 K11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law, nep-pbe and nep-ppm
Date: 2009-01
View list of references

Downloads: (external link)
http://www.econ.uconn.edu/working/2009-01.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:uct:uconnp:2009-01

Access Statistics for this paper

More papers in Working papers from University of Connecticut, Department of Economics
Address: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063
Contact information at EDIRC.
Series data maintained by Christian Zimmermann ().