Law Commons^™

Acquiring Land Through Eminent Domain: Justifications, Limitations, And Alternatives, Daniel Kelly

Daniel B Kelly

The primary functional justifications for eminent domain involve bargaining problems, including the holdout problem, the bilateral monopoly problem and other transaction costs, as well as the existence of externalities. The holdout problem is particularly noteworthy, and this chapter analyzes three types of holdouts, depending on whether the failure in bargaining is the result of strategic behavior among owners, the presence of a large number of owners or a single owner who is unwilling to sell because of a highly idiosyncratic valuation. Although eminent domain solves any potential bargaining problems by transferring land directly from existing owners to the government, eminent …

Cities, Property, And Positive Externalities, Gideon Parchomovsky, Peter Siegelman

Peter Siegelman

Cities are the locales of numerous interactions that generate externalities—both negative and positive. Although the common law provides a vast array of mechanisms for limiting negative externalities, there is a striking absence of provisions for stimulating the production of positive ones. As a consequence, activities whose social benefits are greater than their private costs are not undertaken, with a resulting efficiency loss.

In this Article, we demonstrate how cities can develop commercial districts that allow for the capture of positive externalities by following the example of suburban malls. In malls, anchor stores provide positive externalities—additional customers—to neighboring stores. Anchors capture …