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We construct a model in which an investment opportunity arises for a ®rst mover before it knows the identity of a second mover and in which joint location results in a negative externality. Contracts are inherently incomplete since the ®rst mover cannot bargain over its ex ante investment decision with the anonymous second mover. Given this departure from the setting of the Coase theorem, the allocation of property rights over the externality has real effects on social welfare. We investigatedoi:10.2139/ssrn.280842 fatcat:qrowphvimrh4nkmjasymmwlwzu