Competitive bidding for offshore petroleum leases

Journal Article · · Bell J. Econ.; (United States)

DOI:https://doi.org/10.2307/3003588· OSTI ID:6606824

Reece, D K

This paper develops a formal model of competitive bidding to analyze some aspects of the Federal Offshore oil-leasing system. The lease sales of interest are often characterized by small numbers of auction participants and by high levels of uncertainty regarding the true values of the leases offered. The model suggests that these circumstances may lead to the capture of a substantial fraction of economic rent by the purchases of leases. Indeed, the author's results suggest that the government should be willing to fund a substantial exploration effort to bring better presale information into the public domain. Some effects of the level of uncertainty and the number of competing bidders on industry efficiency are also considered. 26 references.

• Research Organization: Cornell Univ., Ithaca, NY
• OSTI ID: 6606824
• Journal Information: Bell J. Econ.; (United States), Journal Name: Bell J. Econ.; (United States) Vol. 9:2; ISSN BJECD
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
021000 -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002* -- Energy Planning & Policy-- Petroleum
COMPETITION
ECONOMIC ANALYSIS
ECONOMICS
GOVERNMENT POLICIES
INDUSTRY
LEASES
MATHEMATICAL MODELS
OFFSHORE SITES
PETROLEUM INDUSTRY