地域学研究
Online ISSN : 1880-6465
Print ISSN : 0287-6256
ISSN-L : 0287-6256
Endogenizing the Reservation Value in Models of Land Development Over Time and Under Uncertainty
Amitrajeet A. BATABYALBasudeb BISWAS
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2003 年 34 巻 3 号 p. 219-224

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The notion of a reservation value is a key feature of most contemporary dynamic and stochastic models of land development. It is clear that the magnitude of the reservation value has a fundamental bearing on the decision to develop or preserve land. This notwithstanding, many papers that analyze land development in a dynamic and stochastic setting treat a landowner's reservation value as an exogenous variable. Therefore, the purpose of this paper is to endogenize the reservation value in the context of a model of land development over time and under uncertainty. Our analysis shows that the optimal reservation value is the solution to a specific maximization problem. In addition, we also show that there exist theoretical circumstances in which the optimal reservation value is unique.

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© The Japan Section of the Regional Science Association International
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