Consider the application of the demand-revealing process to land assembly that we discussed in class.

Consider the application of the demand-revealing process to land assembly that we discussed in class. We defined D as the developer’s offer for the combined area of all parcels, ai as the government’s estimate of value of parcel i as a share of the value of all parcels Vi as owner i’s reservation price for his parcel Wi = aiD – Vi as the amount that owner i is willing to pay to have the developer assemble the parcels if he receives the amount aiD for his property. (a) What is the condition that determines whether or not the developer should assemble the parcels?







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