Auction markets, bid preparation costs, and entrance fees

Journal Article · Wed Aug 01 04:00:00 EDT 1979 · Land Econ.; (United States)

DOI:https://doi.org/10.2307/3145905· OSTI ID:5621472

Johnson, R N

Ways are examined to reduce the social cost of overinvesting in offshore-petroleum lease-site information because of the auction procedure. Cost assessment is used to illustrate the effect of entrance fees as a disincentive to market entry. Although there is some social gain in using the bidding process to establish the highest-value user, the gain is more than offset and returns to the seller increase when bidders dissipate value while they are estimating development costs. The trend for the private sector to replace auction bidding with other sales techniques reflects these findings. 8 references.

• Research Organization: Univ. of New Mexico, Albuquerque
• OSTI ID: 5621472
• Journal Information: Land Econ.; (United States), Journal Name: Land Econ.; (United States) Vol. 55:3; ISSN LAECA
• Country of Publication: United States
• Language: English

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COMPETITION
COST
ECONOMIC ANALYSIS
ECONOMICS
FINANCIAL INCENTIVES
GEOLOGIC DEPOSITS
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LEASES
MARKET
OFFSHORE SITES
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RESOURCES