Providing Incentives for Efficient Land Assembly

Summary

This 2008 paper by Nicolaus Tideman and Florenz Plassmann tackles the holdout problem: when a project needs many adjacent parcels, individual owners can block it or extort excess payment by refusing to sell.

Key Contribution

The authors design auction-based and self-assessment mechanisms that elicit owners' true valuations and enable efficient land assembly without coercion — a problem closely related to the Harberger tax / COST idea of self-assessed values. It shows that the Georgist tradition contributes not only a tax proposal but practical mechanism-design solutions to land-market frictions.

Bears On

• Concept: Harberger Tax (COST)
• People: Nicolaus Tideman

Sources

1. Tideman & Plassmann (2008), "Providing Incentives for Efficient Land Assembly," SSRN — used for the mechanism-design response to the holdout problem: how to assemble land parcels efficiently without letting individual owners extract holdout rents. Paper