RT Journal Article
SR Electronic
T1 Tenant Favoritism and Right of First Refusals in Farmland Auctions
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 302
OP 324
DO 10.3368/le.080721-0091R1
VO 99
IS 2
A1 Isenhardt, Lars
A1 Seifert, Stefan
A1 Hüttel, Silke
YR 2023
UL http://le.uwpress.org/content/99/2/302.abstract
AB Rights of first refusals (RFRs) granted to tenants in land privatization auctions enable them to purchase their leased land by accepting the highest bid. RFRs may deter bidders and incentivize non–right holders to adjust their bidding. We conjecture that tenant favoritism with RFRs reduces competition and thus sales prices at the expense of the public sellers. To test the conjectures, we compile a data set of land auctions by two privatization agencies in eastern Germany, one favoring tenants along with an RFR, between 2007 and 2018. Double robust matching results indicate RFR-related reductions in the number of bidders and prices.