That's my final offer! Bargaining behavior with costly delay and credible commitment

Land assembly with taxes, not takings

“…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.…”

The impact of bargaining delays under the threat of eminent domain

“…Swope et al. (), for instance, analyze how symmetric and asymmetric delay costs affect bargaining (without access to eminent domain). Their results show that negotiations take the longest when delaying agreement is costless to both buyers and sellers.…”

“…During the assembly process landowners may recognize that behaving strategically can lead to higher offers for their property . For example, landowners may purposefully delay negotiations thereby delaying the project's progress, which may pressure a developer to offer more money to speed up negotiations (e.g., Menezes & Pitchford, ; Miceli & Segerson, ; Miceli & Sirmans, ; Swope, Cadigan, & Schmitt, ). Alternatively, a landowner can claim an offer is not high enough (which may or may not be true) in hopes of seeing an outstanding offer raised (Shavell, ; Strange, ).…”

“…I use this metric because owners have the capacity to impose (delay) costs on the developer as suggested by Miceli and Sirmans (), Miceli and Segerson (), Menezes and Pitchford (), and Swope et al. (). I then test what effect delaying negotiations has on the final transaction prices.…”

“…Empirically, I identify holdouts by looking at the length of time taken to determine a parcel's final transaction price (i.e., the compensation landowners receive in exchange for their property). I use this metric because owners have the capacity to impose (delay) costs on the developer as suggested by Miceli and Sirmans (2007), Miceli and Segerson (2007), Menezes and Pitchford (2004), and Swope et al (2014). I then test what effect delaying negotiations has on the final transaction prices.…”