Concordance among Holdouts∗

Abstract

A holdout problem arises when a disparately-owned good is desired by a prospective buyer only in its entirety, as in land assembly. Market design is then crucial, as fully respecting property rights of many sellers eventually eliminates all trade. We propose a Concordance principle, inspired by the Cournot (1838) theory of concours de produc-teurs: divide profits by exogenously determined shares and impose a Pigouvian tax. This protects collective and approximate individual property rights while solving the holdout problem and, asymptotically, achieving full efficiency. Melding Concordance with most standard auction procedures encourages truth-telling. Extensions of our approach yield mechanisms for collaboration and public goods problems. ∗Weyl is grateful to the Centro de Investigación Económica at the Instituto Tecnológico Autónomo de México (CIE-ITAM) which hosted him on a visit while he conducted parts of this research. Kominers and Weyl respectively acknowledge the support of the National Science Foundation and the Harvard Milton Fund. Both authors additionally acknowledge the Harvard Real Estate Academic Initiative’s support of th