It seems to me that the easement will cost, at most, the amount of money that B could get from A in court for illegally crossing B’s land. Given the additional expenditure of time and legal fees, not to mention the uncertainty of the legal outcome, it will probably be somewhat less than that.
It seems to me that the easement will cost, at most, the amount of money that B could get from A in court for illegally crossing B’s land. Given the additional expenditure of time and legal fees, not to mention the uncertainty of the legal outcome, it will probably be somewhat less than that.
I’m not sure how the parent managed to get to +11 votes. It introduces an additional external complication to the problem and then handles it incorrectly. The limit from this new mechanism is actually the amount that B could get from A in court for A trespassing every time A wishes to travel across B’s land for the duration of the life of the easement—which appears to be indefinite. The value of a once off trespassing suit is not all that relevant.
Well, of course. But assuming B is a rational agent, and assuming the expected damages awarded in court per trespass are additive, she’s going to wait until A has finished building his house, then take him to court for all counts of trespassing, rather than fight each one individually, since that’ll save her a great deal on time and legal fees.
B could get an injunction prohibiting the crossing of his land. Easements traditionally give rise to injunctive relief. That would make A criminally liable if he or his agents crossed his land—it wouldn’t be too hard for B to prevent any construction company from working there. That the outcome of litigation is certain is stipulated to. That’s actually why this problem is interesting—there is some dispute as to whether injunctions or damages are better solutions to these problems.
If you want to make it cleaner, I suppose you could say that B has put up a fence AND obtained a declaratory injunction already, and they’re trying to bargain to have B invalidate the injunction. But I thought the original was clean enough.
B could do all of these things to keep the problem in the box you’re trying to define, but if he does, it’s clear that friendly relations have already broken down between A and B, and by acting in this way, B is reducing the value of the land to A. Does A still want to live next door to a neighbour who is going to be so obnoxious about trifling property disputes?
I understand that you’re asking the question: how can prices be rationally decided in a bilateral monopoly? But the response that bilateral monopolies don’t happen can’t be brushed aside. Rational agents in this hypothetical situation will always be looking for alternatives, and the more is at stake the more creative they will get about it.
The actual solution to this in the real world, 99 times out of 100, is that B just says OK, or A insists on giving him $100 to cover the damages, or something generally amiable. The reason I asked this question is because I’m thinking about the efficiencies of injunctions (which result in bargaining) versus damage awards (which generally don’t). So the only characters I care about are the ones who aren’t neighborly.
Indeed, having confirmed my suspicions that this problem is insoluble, it favors a damage award in this context. B’s actions are almost pure holdup. If all he were entitled to were damages and not injunctive relief, he wouldn’t have nearly the same capacity for holdup, and the outcome looks more like the neighborly one (except with more bad will, perhaps).
In other words, I’m assuming that the agents are selfish and somewhat inhuman—irrational in a big picture sense—because occasionally these disputes do happen. There’s a MAJOR case where a landlord sued over having to install a 1 cubic foot cable-box that increased their property value, and there’s a case of a guy suing to stop someone from using an easement to get to a contiguous property (i.e. he had a right to cross A to get to B, but he was crossing A to get to B and then continuing on to C, and that was impermissible and went to court).
It seems to me that the easement will cost, at most, the amount of money that B could get from A in court for illegally crossing B’s land. Given the additional expenditure of time and legal fees, not to mention the uncertainty of the legal outcome, it will probably be somewhat less than that.
This clever point shouldn’t distract from the intended sense of the post.
I’m not sure how the parent managed to get to +11 votes. It introduces an additional external complication to the problem and then handles it incorrectly. The limit from this new mechanism is actually the amount that B could get from A in court for A trespassing every time A wishes to travel across B’s land for the duration of the life of the easement—which appears to be indefinite. The value of a once off trespassing suit is not all that relevant.
Well, of course. But assuming B is a rational agent, and assuming the expected damages awarded in court per trespass are additive, she’s going to wait until A has finished building his house, then take him to court for all counts of trespassing, rather than fight each one individually, since that’ll save her a great deal on time and legal fees.
B could get an injunction prohibiting the crossing of his land. Easements traditionally give rise to injunctive relief. That would make A criminally liable if he or his agents crossed his land—it wouldn’t be too hard for B to prevent any construction company from working there. That the outcome of litigation is certain is stipulated to. That’s actually why this problem is interesting—there is some dispute as to whether injunctions or damages are better solutions to these problems.
If you want to make it cleaner, I suppose you could say that B has put up a fence AND obtained a declaratory injunction already, and they’re trying to bargain to have B invalidate the injunction. But I thought the original was clean enough.
B could do all of these things to keep the problem in the box you’re trying to define, but if he does, it’s clear that friendly relations have already broken down between A and B, and by acting in this way, B is reducing the value of the land to A. Does A still want to live next door to a neighbour who is going to be so obnoxious about trifling property disputes?
I understand that you’re asking the question: how can prices be rationally decided in a bilateral monopoly? But the response that bilateral monopolies don’t happen can’t be brushed aside. Rational agents in this hypothetical situation will always be looking for alternatives, and the more is at stake the more creative they will get about it.
The actual solution to this in the real world, 99 times out of 100, is that B just says OK, or A insists on giving him $100 to cover the damages, or something generally amiable. The reason I asked this question is because I’m thinking about the efficiencies of injunctions (which result in bargaining) versus damage awards (which generally don’t). So the only characters I care about are the ones who aren’t neighborly.
Indeed, having confirmed my suspicions that this problem is insoluble, it favors a damage award in this context. B’s actions are almost pure holdup. If all he were entitled to were damages and not injunctive relief, he wouldn’t have nearly the same capacity for holdup, and the outcome looks more like the neighborly one (except with more bad will, perhaps).
In other words, I’m assuming that the agents are selfish and somewhat inhuman—irrational in a big picture sense—because occasionally these disputes do happen. There’s a MAJOR case where a landlord sued over having to install a 1 cubic foot cable-box that increased their property value, and there’s a case of a guy suing to stop someone from using an easement to get to a contiguous property (i.e. he had a right to cross A to get to B, but he was crossing A to get to B and then continuing on to C, and that was impermissible and went to court).