Testing Competition in U.S. Offshore Oil and Gas Lease Bidding∗
نویسندگان
چکیده
Since the 1980s, most of the oil and gas tracts auctioned by the federal government in the Gulf of Mexico are adjacent to tracts that are already under lease. Owners of neighboring leases enjoy incumbency advantages that act as a barrier to entry for other firms. We ask whether owners of neigboring leases take advantage of their situation and agree not to compete. To answer this question, we develop several tests of competitive bidding in pure common value, first-price auctions where rejection suggests collusion. We implement these tests using data on bids and ex post values. The results have important implications for rent capture and auction design. ∗Haile: Department of Economics and Cowles Foundation, Yale University; Hendricks: Department of Economics, University of Wisconsin; Porter: Department of Economics, Northwestern University; Onuma, Department of Economics, University of Wisconsin.
منابع مشابه
Recent U.S. Offshore Oil and Gas Lease Bidding: A Progress Report∗
The U.S. Mineral Management Service (MMS) uses auctions to allocate exploration and drilling rights for oil and gas on federal lands on the Outer Continental Shelf (OCS). The federal offshore leasing program began in 1954, and there have been few alterations in the auction mechanism. However, the environment in which firms bid in these auctions has experienced a number of substantial changes. O...
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