Incomplete markets do not provide accurate information about people's subjective valuations of goods. Knowledge of these subjective valuations is often important, however, for example when compensation payments for damaged or destroyed property are required. We argue that in such cases, an...

There are three separate strands of literature in economics that are related to the efficiency of takings under eminent domain: one addresses the question of optimal compensation for properties that are taken, the second inquires how governments might learn the values of properties that they...

The efficiency of mechanisms to control activities with negative externalities is limited by uncertainty about the social costs of these activities. Existing regulatory mechanisms require negotiated compromise about either the prices of activities or the levels to be tolerated. We offer a...

Existing mechanisms for managing eminent domain suggest that, when there is uncertainty about whether a government will take property, efficiency requires that the property owner receive at most partial compensation. We argue that announcing the possibility of a taking is itself a taking when...