Consider a piece of property that is jointly owned by two individuals, each with 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 property.
(a) If the two owners can bargain with each other costlessly, do you expect a sale to occur (assuming both owners have to give their consent)?
(b) 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 proceeds, do you expect a sale to occur in this case?
(c) Describe the trade-off involved in a rule that allows either one of the parties to "force" a sale of jointly owned property when they cannot come to an agreement.