abstract
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.