B could get an injunction prohibiting the crossing of his land. Easements traditionally give rise to injunctive relief. That would make A criminally liable if he or his agents crossed his land - it wouldn't be too hard for B to prevent any construction company from working there. That the outcome of litigation is certain is stipulated to. That's actually why this problem is interesting - there is some dispute as to whether injunctions or damages are better solutions to these problems.
If you want to make it cleaner, I suppose you could say that B has put up a fence AND obtained a declaratory injunction already, and they're trying to bargain to have B invalidate the injunction. But I thought the original was clean enough.
B could do all of these things to keep the problem in the box you're trying to define, but if he does, it's clear that friendly relations have already broken down between A and B, and by acting in this way, B is reducing the value of the land to A. Does A still want to live next door to a neighbour who is going to be so obnoxious about trifling property disputes?
I understand that you're asking the question: how can prices be rationally decided in a bilateral monopoly? But the response that bilateral monopolies don't happen can't be brushed aside. Rational agents in this hypothetical situation will always be looking for alternatives, and the more is at stake the more creative they will get about it.
This puzzled me. I'm pretty sure it's one of those unsolvable questions, but I'd want to know if it's not.
Two members of the species Homo Economus, A and B, live next to each other. A wants to buy an easement (a right to cross B's property, without which he cannot bring anything onto his lot) from B so that he can develop his property. B, under the law, has an absolute right to exclude A, meaning that nothing happens unless B agrees to it. The cost to B of granting this easement is $10 - it's over a fairly remote part of his land and he's not using it for anything else. A values the easement at $500,000, because he's got a sweet spot to build his dream house, if only he could construction equipment and whatnot to it. A and B know each others costs and values. They are "rational" and purely self-interested and bargaining costs zero. What's the outcome? I'm guessing it's "Between $5 and $500k," or "There is no deal unless one can credibly commit to being irrational." But I'm really not sure.
This could be asked as "In a bilateral monopoly situation where the seller's reservation price is $5 and the buyer's is $500,000, what is the predicted outcome?" But I figured the concrete example might make it more concrete.
Now that I've written this, I'm tempted to develop a "True price fallacy" and its implications for utilitarian measurement. But that's a separate matter entirely.