Spatial Planning

"Land and property development processes obviously can be seen as a social situation in which the interaction of individuals or groups of individuals is one of the essential elements. To study and understand social situations, it is important to analyse how the decisions of actors are interrelated and how those decisions result in outcomes. In this paper, we propose a game theoretical modelling approach to analyse it. Hence, the objective of the paper is to investigate the usefulness as well as the limitations of game theoretical modelling for analysing and predicting the behaviour of actors in decision-making processes with respect to the development of land and property. For that purpose, we have developed game models for the case study of the development of a greenfield residential location in the Netherlands with respect to the implementation of new Dutch legislation on cost recovery.

Our study demonstrates that game theory could help us to identify the key strategic decisions of land and property development projects by showing the different payoffs for stakeholders of their chosen strategies and selecting the equilibrium in which all stakeholders involved are best of. We also found many limitations of using game theory in our case study especially regarding the assumptions underlying the model. However, we conclude that game theoretical modelling can be a useful decision support tool in spatial planning, because it provides a way to think about the complexity of strategic interaction and, in particular, about the conflicting structure of collective decision-making processes."

The structure of this chapter is as follows. In Section 4.2, we will discuss value capturing and externalities problems in detail. Section 4.3 provides an introduction to game theory and a discussion of the supposed advantages as well as limitations of applying this approach to analyse the bargaining process in implementing value capturing methods. Section 4.4 presents a brief description of issues related to value capturing within the context of location and infrastructure development processes and its funding mechanisms in the Netherlands. In this section, the stakeholders involved will be introduced along with their strategies and the institutional context in which they operate. In Section 4.5, the bargaining model, based on a game theoretical approach will be constructed with respect to the implementation of value capturing methods in the Netherlands. Finally, Section 4.6 discusses the usefulness of bargaining game theory for modelling the implementation of value capturing processes and suggests the next steps for further analysis.

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"Purpose:
The results of the analysis attempt to provide an understanding on how a phenomenon or process of collective action with regard to the negotiation in value capturing can be expected to happen in a certain way which in the end could improve our understanding of value capturing implementation processes.

Design/methodology/approach:
Game theory is utilized to model the structure of relations between the actors involved. Game theory is a mathematical approach to study collective decision-making situations in which the decision makers involved have conflicting preferences. Here, we consider the implementation of value capturing as the result of an agreement between a municipality and landowners to contribute to the costs of public infrastructure development which in essence is a form of collective action.

Findings:
The paper is not only demonstrating the usefulness of game theoretical modelling in conceptualising relations between different stakeholders in the implementation of value capturing and suggesting the best possible strategy for every stakeholder; but also observing the limitations of the methods in analyzing the behaviour of actors involved in decision-making processes with respect to value capturing.

Originality:
Unlike most of value capturing studies which focused on either a valuation point of view (how much value can be captured?), a governance or instrumentalist point of view (which instruments can be effective for value capturing?), or a political point of view (to whom belongs the increment value that is the result of government investments or decisions?); this paper emphasizes an alternative perspective to value capturing, namely the decision-making or negotiation process underlying value capturing by relying on game-theoretical approach."

"Value capturing is considered as a promising additional way of funding infrastructure development. However, its implementation is often problematic because the instruments that can be used for it (i.e. taxes, fees, and other types of fiscal regulation) most likely will face a lack of support. An alternative approach to value capturing might be to stimulate the stakeholders to bargain over the distribution of the increment values.

This paper presents the analysis of the bargaining process with respect to the implementation of value capturing based on concepts drawn from cooperative game theory in partition function form. The institutional setting of location development related to infrastructure development in the Netherlands is used to provide an empirical context to the analysis. As a validation, the game is played with experts in Dutch planning and infrastructure development practice. Our study shows that a game theoretical approach offers a useful method to conceptualise relations between different stakeholders and to analyze the bargaining and negotiation processes to reach an agreement about the efficient and fair allocation of the increment land values."

In Vietnam, similarly to other countries with the same system, transformation of the economy from one
based on central planning into one founded on market principles, provides incomplete property rights in
land and property markets. Nonetheless, cities like Ho Chi Minh City (HCMC) are experiencing strong
growth in commercial property markets. Although the real estate market is still suffering from the
recession in many parts of the world, commercial property development in HCMC is booming. This paper
explores the present privatization process and the changing property rights regime related to the real
estate market in Vietnam. Employing logistic regression analysis, this study also examines opportunities
of foreign and domestic investors in the commercial real estate market in HCM city centre. The findings
of this study show that there is not yet a level playing field for foreign and domestic investors, mainly
caused by a different property rights regime for both groups of investors, especially related to land lease
conditions. We also find that both groups invest in different categories of commercial real estate.
However, this does not necessarily lead to reduced foreign investment in Vietnam's real estate market,
which means that the transition and privatization process in Vietnam is still moving in the right
direction.

This paper reports an experiment based on the model of bilateral sequential bargaining over the distribution of a certain value in a laboratory setting within a real specific context of property development in the Netherlands. We have involved only property development professionals as participants in the experiment who have experience with the context. We have also extended the experiment into three different negotiation games distinguished by the availability of information to the participants: a negotiation game with incomplete information, asymmetric information, and complete information. We have found in this experiment that the availability of information could affect the plausibility to reach an agreement, particularly due to a restricted communication setting. This study also provides evidences that it is in the negotiators’ concern to reach an agreement with a fair outcome, which is defined here as the equilibrium, regardless the availability of the information to them.

Negotiations have always played an important role in urban planning and in land and property development processes. Numerous case-study-based researches have been done to demonstrate the significance of negotiation to resolve the divergent interests of stakeholders. In this article, an alternative methodological perspective is applied by analysing the negotiation as a more generic mechanism through a role-playing face-to-face negotiation experiment with experts in the field that resembles – to a certain extent – real-life negotiation processes.

A number of important aspects of the outcomes were analysed to get useful insights into stakeholders’ behaviour in the negotiation processes where the negotiation takes place voluntarily and spontaneously. It is shown in this study that within the setting of the experiment, the stakeholders can still be expected to concern about the equality of outcome. Moreover, it also confirms that the information availability, especially regarding the financial conditions under which the developments take place, plays an important role in defining the success of the negotiations. Finally, based on the experiment, it is possible to define the urban planning equilibrium satisfying all stakeholders in the negotiation process.

Balikpapan has grown to become one of the most important cities in Indonesia, due to its oil industry. However, with the decline in oil production and the global decrease in oil prices, the city has attempted to diversify its industrial and service activity economy. This paper assesses three key factors underlying this transformation: public policies and regulations, urban infrastructure, and knowledge creation and utilisation. Future opportunities and challenges the city may face are also discussed. In the light of urban planning and development perspectives , this study can become a lesson for other cities, especially in developing countries, which some of them may overly rely on natural resources-based economy, to anticipate the transition period after an economic boom due to natural resource endowment and its price decrease.

In this article we explore an expansion of geodesign to analyze processes of competition and cooperation by combining it with game-theoretical modelling and experiments. We test the applicability of  facilitating these two fields in an integrated workshop by analysing the case study of oversupply of development sites in the Liemers corridor. Two workshops were held, with representatives of the six municipalities involved and with the regional and provincial authority, in which participants negotiated over the distribution of the supply of development sites. The workshops were performed around an interactive MapTable, with spatial information (from GIS) and financial information (from the game-theoretical model) being visualized in real-time. The integrated workshops were assessed to discover differences in terms of process and outcomes, and they examine whether and how learning takes place. We conclude that the combination of game theory and geodesign provides added value for planning support by facilitating a realistic discussion, and negotiation that is strongly connected to real-life locations, and by aiming at designing a common, collaborative solution. Through the integrated workshop learning about the problem of oversupply in financial and geographical terms and also about each other’s motives and behaviour is stimulated.

The aim of this paper is to study the impacts of bottom-up information provision about on-street parking places on parking dynamics under heterogeneous conditions. Using an agent-based simulation model, performance is compared between a bottom-up vehicle-to-vehicle communication strategy and a strategy that combines parking sensors and vehicle-to-vehicle communication. In the latter approach on-street parking places are all equipped with sensors capable of disseminating their status. The results show that search time is decreased for informed 'smart' cars, especially under spatially heterogeneous conditions, for the sensor-based strategy. Furthermore, for the case of the sensor-based strategy, the results point out that smart cars outperform regular cars in terms of walking distance under all circumstances. The positive impacts for the vehicle-to-vehicle strategy are limited to walking distance improvements only.