Laboratory Experiments of Tradable Development Rights: A Synthesis of Different Treatments

Abstract

Tradable development rights (TDR) are considered by scholars and regulators in various countries as a means of reducing land consumption efficiently. Similar to the development of CO 2 -certificate trading schemes, the methodology of experimental economics can be used to derive empirical evidence on the core parameters and problems of TDR schemes, thus extending theoretical modelling and evidence from case studies. Building on a common laboratory experimental framework, we discuss results from five distinct experiments that consider mechanisms of allocation, resilience against external shocks, political business cycles, communication and collusion, and risk. These results provide initial empirical directions for the further study and introduction of TDR schemes for managing and reducing environmental issues related to land consumption for building projects.

Do Administrative Incentives for the Containment of Cities Work? An Analysis of the Accelerated Procedure for Binding Land-Use Plans for Inner Urban Development in Germany

“…Since the introduction of the 30 ha per day objective, there has been an intense debate about an adequate policy to achieve this objective. Economists have mainly promoted economic instruments, such as the introduction of a development tax or tradable development permits [41,42]. However, so far, the German government has not introduced economic instruments, but has mainly used legal and planning instruments by adjusting the planning and building laws, such as the FBC [43,44].…”