Consider a piece of property that is jointly owned by two individuals (“owner 1” and “owner 2”), each of whom owns a one-half share. Suppose that in order to sell owner 1 requires $3,000 for his half share, but owner 2 requires $6,000 for her half share. A buyer arrives and offers $10,000 for the entire piece of jointly owned property.
If the two owners can bargain with each other at no cost, will a sale occur between the owners and the buyer in this case (assuming both owners have to give their consent)? (Enter “Yes” or “No”)
Suppose instead that the two owners cannot bargain with each other (for example, they are a divorcing couple).
If each is entitled to one half of the sale proceeds, will a sale occur in this case? (Enter “Yes” or “No”)
Assuming sale proceeds would be equally split between owner 1 and owner 2, is it Pareto efficient for owner 1 to force the sale of the entire parcel of jointly owned property, provided the law provided him with a right to do so? (Enter “Yes” or “No”)
Assuming sale proceeds would be equally split between owner 1 and owner 2, is it Kaldor-Hicks efficient for owner 1 to force the sale of the entire parcel of jointly owned property, provided the law provided him with a right to do so? (Enter “Yes” or “No”