Bargaining behavior and the tragedy of the anticommons

Parente, Michael D.; Winn, Abel

doi:10.1016/j.jebo.2012.08.002

Cited by 15 publications

(6 citation statements)

References 20 publications

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“…The result that weak competition helps to navigate seller holdout strengthens the findings of Cadigan et al (2011), Parente and Winn (2012) and Isaac, Kitchens and Portillo (2016) that competition among sellers makes land assembly quite easy. Notice that in their studies the sellers competed with perfect substitutes, while in the present study the buyer incurred a 20% loss in value from buying the alternative parcel.…”

Section: Discussionsupporting

confidence: 75%

“…Several laboratory studies have examined the holdout problem. The most relevant for our research are those by Cadigan, et al (2009Cadigan, et al ( , 2011, Swope, et al (2011), Collins and Isaac (2012), Parente and Winn (2012), Shupp, et al (2013), Cadigan, Schmitt and Swope (2014), Zillante, Read and Schwarz (2014), Kitchens and Roomets (2015) and Isaac, Kitchens and Portillo (2016). We summarize these studies in Table 1, listing the treatment variables the authors studied and the primary results.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

“…Out of 64 groups none failed to assemble the necessary parcels. Parente and Winn (2012) also conducted experiments in which the assembler (represented by the software) needed two parcels and faced three landowners. Out of 768 negotiations where assembly failure was possible, it occurred only 6 times, a failure rate of 0.8%.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

“…Isaac, Kitchens and Portillo (2016) created competition in two ways. First, similar to Cadigan, et al (2011) and Parente and Winn (2012) they had two treatments in which a buyer faced four sellers but needed to assemble only two or three parcels. Out of 64 negotiations across these treatments assembly failure occurred in only five.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

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Who's holding out? An experimental study of the benefits and burdens of eminent domain

Winn

McCarter

2018

Journal of Urban Economics

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A substantial literature identifies seller holdout as a serious obstacle to land assembly, implying that eminent domain is an appropriate policy response. We conduct a series of laboratory experiments to test this view. We find that when there is no competition and no eminent domain, land assembly suffers from costly delay and failed assembly; participants lose 18.1% of the available surplus. Much of the inefficiency is due to low offers from the buyers ("buyer holdout") rather than strategic holdout among sellers. When buyers can exercise eminent domain the participants lose 18.6% of the surplus. This loss comes from spending money to influence the fair market price and forcing sellers to sell even when the sellers value the property more than the buyer. Introducing weak competition in the form of a less valuable substitute parcel of land reduces delay by 35.7% and virtually eliminates assembly failure, so that only 11.5% of the surplus is lost.

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Section: Discussionsupporting

confidence: 75%

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

See 2 more Smart Citations

Who's holding out? An experimental study of the benefits and burdens of eminent domain

Winn

McCarter

2018

Journal of Urban Economics

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“…2 Holdout has been observed in laboratory experiments by, e.g., Cadigan, Schmitt, Shupp, & Swope (2009, Swope, Wielgus, Schmitt & Cadigan (2011), Parente & Winn (2012), Collins & Isaac (2012), Zillante, Schwarz, & Read (2014), Swope, Cadigan & Schmitt (2014) and . Brooks & Lutz (2016) and Portillo (2017) report field data consistent with seller holdout.…”

Section: Experiments Designmentioning

confidence: 99%

Land assembly with taxes, not takings

DeSantis

McCarter

Winn

2018

Applied Economics Letters

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We use a novel tax mechanism-"rejected offer reassessment"in laboratory experiments to discourage seller holdout and facilitate land assembly. Under this mechanism if a landowner rejects a developer's offer his taxable property value is reassessed to be equal to the rejected offer, increasing his taxes. We find that, relative to a control treatment, rejected offer reassessment discourages the magnitude of seller holdout (but not its frequency) and increases the rate of successful land assembly by almost 60%. It also increases the gains from trade by 22.1% relative to the control treatment, but the difference is not statistically significant.

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