Concordance Among Holdouts

38 Pages Posted: 18 Apr 2010 Last revised: 21 Sep 2012

Scott Duke Kominers

Harvard University

E. Glen Weyl

Microsoft Research; Yale University

Date Written: September 20, 2012

Abstract

Holdout problems prevent decentralized aggregation of complementary goods, but the coercion required to overcome holdout may encourage abuse and violate fairness standards. We propose second-best efficiency, abuse-prevention, and fairness criteria for procedures intended to reduce holdout. Our criteria are jointly satisfied by a class of “Concordance” procedures. In these procedures, the prospective buyer makes a take-it-or-leave-it offer to the group of sellers, and the sellers use an efficient collective choice mechanism to decide as a group whether to accept the buyer’s offer. In the case of sale, the buyer’s offer is divided among the sellers in a fashion independent of individual sellers’ actions. Each seller retains the option to receive, in the event of sale, her share of the offer (without making any additional payments) in exchange for not influencing the collective decision. Our approach is applicable in a range of contexts including land assembly, spectrum aggregation, corporate acquisitions, and patent pool formation.

Keywords: Holdout, Market Design, Public Goods, Quasi-Lindahl, Anticommons, Eminent Domain

JEL Classification: D40, D63 D71, D82, L10, K11

Suggested Citation

Kominers, Scott Duke and Weyl, E. Glen, Concordance Among Holdouts (September 20, 2012). Harvard Institute of Economic Research Discussion Paper. Available at SSRN: https://ssrn.com/abstract=1591466 or http://dx.doi.org/10.2139/ssrn.1591466

Scott Duke Kominers

Harvard University ( email )

Rock Center, Harvard Business School
Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://www.scottkom.com/

Eric Glen Weyl (Contact Author)

Microsoft Research ( email )

641 Avenue of the Americas
7th Floor
New York, NY 10011
United States
(857) 998-4513 (Phone)

HOME PAGE: http://www.glenweyl.com

Yale University ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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