Joint Bidding in Federal O®shore Oil and Gas Lease Auctions
نویسندگان
چکیده
This paper provides an explanation for why cartels are not observed frequently in mineral-rights auctions even though it was not illegal for them to form. We use the techniques of mechanism design to characterize the e±cient, incentive compatible cartel and show that it can be implemented by a ̄rstprice knockout tournament with information sharing. We show, however, that bidders with the highest signals typically prefer to bid alone rather than join the cartel. We examine bid data from federal o®shore oil and gas auctions for evidence that cartels used bid coordination schemes. We also examine the determinants of joint bidding.
منابع مشابه
Bidding Rings and the Winners Curse: The Case of Federal O¤shore Oil and Gas Lease Auctions
This paper extends the theory of legal cartels to a¢ liated private value and common value environments, and applies the theory to explain joint bidding patterns in U.S. federal government o¤shore oil and gas lease auctions. We show that e¢ cient collusion is always possible in private value environments, but may not be in common value environments. In the latter case, fear of the winners curs...
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This paper extends the theory of legal cartels to a.liated private value and common value environments, and applies the theory to explain joint bidding patterns in U.S. federal government o.shore oil and gas lease auctions. We show that e.cient collusion is always possible in private value environments, but may not be in common value environments. In the latter case, fear of the winner’s curse ...
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