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Analysis of alternative bidding systems for leasing offshore oil

Journal Article · · Bell J. Econ. Manage. Sci.; (United States)
DOI:https://doi.org/10.2307/3003357· OSTI ID:5743518
This study utilizes a formal model of competitive bidding to analyze some alternative procedures for selling offshore oil leases. It is assumed that the population of leases to be sold contains tracts having both positive and negative true values and that firms are able to obtain informative, but highly uncertain, estimates of the true value of each tract. Firms' Nash-equilibrium bidding strategies for bonus, profit-share, and a form of royalty bidding are derived; then the expected division of economic rent between buyer and seller for the three bidding systems is analyzed.
Research Organization:
Cornell Univ., Ithaca, NY
OSTI ID:
5743518
Journal Information:
Bell J. Econ. Manage. Sci.; (United States), Journal Name: Bell J. Econ. Manage. Sci.; (United States) Vol. 10:2; ISSN BJEMA
Country of Publication:
United States
Language:
English