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An aspect of indivisible land development with a reservation level of revenue |
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| Authors: | |
| Institution: | (1) Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA;(2) Korea Energy Economics Institute, 665-1 Naeson2-dong, Euiwang-si, Kyonggi-do, 473–713, Republic of Korea |
| Abstract: | Recently, Batabyal and Yoo (2003) have studied aspects of indivisible and divisible land development in a dynamic and stochastic framework. In this note, we complement the analysis in this paper by examining an aspect of the indivisible land development decision when a landowner has an exogenously given reservation level of revenue. In particular, we show that the magnitude of the first record (largest offer) that exceeds the landowner s reservation revenue is independent of the time at which this record is received by the landowner. |
| Keywords: | Dynamic Indivisible Land Development Reservation Value Uncertainty |
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