Can the builder bribe the owner not to enforce it

Reference no: EM131227527

The owner of a particular house has an unobstructed view of the ocean from his front window. However, the owner of a vacant lot in front of the house announces plans to build a house of his own. Suppose that a one-story house will partially obstruct the view, but a two-story house will block it completely. The builder's profit and the value of the owner's view are shown below:

(a) Is it efficient for the house to be built? If so, how many stories should it be? Suppose the original owner seeks an injunction halting construction.

(b) Describe the bargaining between the builder and the owner if the court refuses to grant the injunction.

Reference no: EM131227527

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