Second-best mechanisms for land assembly and hold-out problems

• 成果类型: Article
• 署名作者: Grossman, Zachary; Pincus, Jonathan; Shapiro, Perry; Yengin, Duygu
• 署名单位: State University System of Florida; Florida State University; University of Adelaide; University of California System; University of California Santa Barbara
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.03.002
• 发表日期: 2019
• 页码: 1-16
• 关键词: Land assembly; Assembly problems; Complementary goods; Hold-out; Eminent domain; property rights; mechanism design; Desirable properties; Impossibility theorem; Second-best characterization; SP mechanism; Just compensation; Public-Private Partnerships; incentive compatibility; strategy-proofness; individual rationality; Budget-balance; Self-finance

摘要

Land can be inefficiently allocated when attempts to assemble separately-owned parcels are frustrated by holdouts. Eminent domain can be used neither to gauge efficiency nor to determine adequate compensation. We characterize the least-inefficient class of direct mechanisms that are incentive compatible, self-financing, and protect the property-rights of participants. The second-best mechanisms, which we call Strong Pareto (SP), utilize a second-price auction among interested buyers, with a reserve sufficient to compensate fully all potential sellers, who are paid according to fixed and exhaustive shares of the winning buyer's offer. These mechanisms are strategy-proof (dominant-strategy incentive compatible), individually rational and self-financing. They generate higher social welfare in each problem compared to any other type of mechanism satisfying these properties. (C) 2019 Elsevier B.V. All rights reserved.