Expropriation power in private dealings: Quota rule in collective sales

Complementarity is common in land-assembly problems, such as a developer buying the entirety of apartment units to complete a development project. Holdout (delay or block of projects by sellers) is common in these problems under unanimity-rule. Motivated by the recent policy practices in strata-sales, we introduce a new bargaining model with quota-rule. We show that under quota-rule, there is no holdout when there are two sellers or players are sufficiently patient. No-holdout equilibrium is unique, efficient and yields immediate sale of all goods as outcome. When quota rule is used, efficient equilibrium is still obtained under alternative bargaining protocols and with multiple sellers. We also show that the no-holdout result is not due to the specific bargaining protocol.