Abstract/Summary

Site consolidation is a perennial issue in the study of land economics. The emergence in many contexts of policies that follow variations on ‘land readjustment’ represent a common way for policy makers to overcome the barriers to wholesale redevelopment. In several important respects the nature of the problems that land readjustment seeks to confront are best thought of as questions in cooperative game theory. In this contribution we seek to explore the underpinning logic of land-readjustment using fundamental concepts in cooperative game theory: the Shapley value and the Core. In addition, we present results of an experiment on coalition and value distribution in four European countries. Our results shed light on a range of important practical issues for the policy ranging from the conditions under which development might be self-initiated to coalition stability, and to the value of an animating agency such as urban planning.