Sequential Bargaining, Land Assembly, and the Holdout Problem
Thomas Miceli () and
Kathleen Segerson ()
No 2011-13, Working papers from University of Connecticut, Department of Economics
Although the holdout problem is a well-established part of legal and economic lore, the exact source of the problem is not well understood. The problem is usually attributed to high transaction costs or excessive bargaining power on the part of sellers once they recognize the scope of the project. In an effort to isolate the essential features of the problem, this paper considers the simplest possible setting in which a buyer bargains sequentially with a series of sellers, each of whose land is necessary to realize the gain from a large-scale project. Using ordinary Nash bargaining and assuming complete information, we identify a minimum set of factors that give rise to a holdout problem, which highlight the importance of commitment and the inefficiency of partial assembly.
Keywords: Bargaining; holdout problem; land assembly (search for similar items in EconPapers)
JEL-codes: D40 K11 L14 R14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ppm
Date: 2011-06, Revised 2012-01
References: View complete reference list from CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
http://web2.uconn.edu/economics/working/2011-13R.pdf Full text (revised version) (application/pdf)
http://web2.uconn.edu/economics/working/2011-13.pdf Full text (original version) (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:uct:uconnp:2011-13
Access Statistics for this paper
More papers in Working papers from University of Connecticut, Department of Economics University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063. Contact information at EDIRC.
Series data maintained by Mark McConnel ().