Effect of aggressive and conservative bias in Federal offshore oil and gas lease bonus bidding

Technical Report · Sun Jun 01 04:00:00 EDT 1980

OSTI ID:5358357

Dougherty, E L; Lohrenz, J

Assuming bids are lognormally distributed, a measure of the degree of aggressive or conservative bias is derived relative to his competitors which an individual bidder displays in bidding for Federal offshore oil and gas leases, and how (a) the expected frequency of submitting the highest bid for a lease, (b) the expected ratio of the highest bid to the geometric mean of bids, and (c) the expected fraction of money left on the table, vary with the bias and the number of bids per lease are quantified. Results achieved with biased bids for Federal offshore oil and gas leases agree with the statistical predictions just as the winnings and losings of lucky and unlucky gamblers collectively follow the inherent odds of any game they are playing. The findings can be used by individual bidders to make a priori predictions of results from aggressive or conservative bidding. Or, after bidding, the results can be used to make assessments of how a bidder (or estimator) fared compared to the inherent odds due to luck and acumen, or their opposites.

• Research Organization: Geological Survey, Denver, CO (USA). Conservation Div.
• OSTI ID: 5358357
• Report Number(s): LPR-P-11/15B
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
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& Business Aspects
03 NATURAL GAS
030600 -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
BIDS
CONTINENTAL MARGIN
CONTINENTAL SHELF
ECONOMETRICS
ECONOMICS
FORECASTING
GEOLOGIC DEPOSITS
LEASING
MATHEMATICAL MODELS
MATHEMATICS
NATURAL GAS DEPOSITS
OFFSHORE SITES
PETROLEUM DEPOSITS
RESOURCES
STATISTICAL MODELS
STATISTICS