A Bargaining Model of Holdouts and Takings

Thomas Miceli and Kathleen Segerson ()

No 2006-22, Working papers from University of Connecticut, Department of Economics

Abstract: The holdout problem is commonly cited as the justification for eminent domain, but the nature of the problem is not well understood. This paper models the holdout problem in a bargaining framework, where a developer seeks to acquire several parcels of land for a large-scale development. We show that in the absence of eminent domain, holdouts are inevitable, threatening costly delay. However, if the developer has the power to use eminent domain to acquire the land from holdouts, all sellers will bargain, thus avoiding delay. An offsetting cost is that owners may negotiate prices below their true value, possibly resulting in excessive transfer of land to the developer.

Keywords: Eminent domain; holdout problem; bargaining (search for similar items in EconPapers)
JEL-codes: C78 K11 R14 R52 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2006-06, Revised 2007-03
Note: We acknowledge the comments of participants at the Takings Conference at the University of California, Santa Barbara, May 12-13, 2006.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
https://media.economics.uconn.edu/working/2006-22r.pdf Full text (revised version) (application/pdf)
https://media.economics.uconn.edu/working/2006-22.pdf Full text (original version) (application/pdf)

Related works:
Journal Article: A Bargaining Model of Holdouts and Takings (2007)
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: https://EconPapers.repec.org/RePEc:uct:uconnp:2006-22

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.
Bibliographic data for series maintained by Mark McConnel ().