Mechanism design for land acquisition

We consider the issue of designing Bayesian incentive‐compatible, efficient, individually rational and balanced mechanisms for Land Acquisition. This is a problem of great practical importance in developing countries. Several sellers, each with one unit of land, are located at the nodes of a graph. Two sellers are contiguous if they are connected by an edge in the graph. The buyer realizes a positive value only if he can purchase plots that constitute a path of given length. Our main result is that there is a robust set of priors for which successful mechanisms exist when there are at least two distinct feasible sets of contiguous sellers. The analysis also identifies the role of critical sellers who lie on all such feasible sets.