The Role of Information in U.S. Offshore Oil and Gas Lease Auctions
51 Pages Posted: 13 Dec 2010 Last revised: 10 Jun 2021
Date Written: October 1992
This paper describes the U.S. offshore oil and gas lease sales, conducted by the Department of the Interior since 1954. Several decision problems are discussed, including bidding for leases, the government's decision whether to accept the highest bid, the incidence and timing of exploratory drilling, and the formation of bidding consortia. It is argued that equilibrium models that emphasize informational and strategic issues, and that account for institutional features of the leasing program, provide accurate predictions of outcomes.
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