Asymmetric Information, Information Externalities, And Efficiency: The Case Of Oil Exploration
AbstractIn this article we examine the effect of private information and information externalties on the ex post efficiency of investment in oil exploration. We show that too much drilling tends to occur if firms believe that the area is likely to contain a sizeable pool of oil, and too little drilling occurs if the opposite is true. Bargaining with well-defined property rights to the information externality can eliminate underinvestment, but overinvestment remains a problem because firms have an incentive not to disclose their private information.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by UBC Department of Economics in its series UBC Departmental Archives with number 89-09.
Length: 41 pages
Date of creation: 1989
Date of revision:
Contact details of provider:
information ; oil fields ; petroleum resources ; energy ; entreprises;
Other versions of this item:
- Kenneth Hendricks & Dan Kovenock, 1989. "Asymmetric Information, Information Externalities, and Efficiency: The Case of Oil Exploration," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 164-182, Summer.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- King, Stephen P., 1995. "Search with free-riders," Journal of Economic Behavior & Organization, Elsevier, vol. 26(2), pages 253-271, March.
- Lin, C.-Y. Cynthia & Leighty, Wayne, 2007.
"Government Leasing Policy and the Multi-Stage Investment Timing Game in Offshore Petroleum Production,"
Institute of Transportation Studies, Working Paper Series
qt0x81x3jp, Institute of Transportation Studies, UC Davis.
- Lin, C.-Y. Cynthia & Leighty, Wayne, 2007. "Government Leasing Policy and the Multi-Stage Investment Timing Game in Offshore Petroleum Production," Institute of Transportation Studies, Working Paper Series qt1rj6v4df, Institute of Transportation Studies, UC Davis.
- Angela Chang & Shubham Chaudhuri & Jith Jayaratne, 1997. "Rational herding and the spatial clustering of bank branches: an empirical analysis," Research Paper 9724, Federal Reserve Bank of New York.
- Lin, C.-Y. Cynthia, 2009. "Estimating strategic interactions in petroleum exploration," Energy Economics, Elsevier, vol. 31(4), pages 586-594, July.
- Çolak, Gönül & Günay, Hikmet, 2011. "Strategic waiting in the IPO markets," Journal of Corporate Finance, Elsevier, vol. 17(3), pages 555-583, June.
- Smith, James L. & Thompson, Rex, 2009.
"Rational plunging and the option value of sequential investment: The case of petroleum exploration,"
The Quarterly Review of Economics and Finance,
Elsevier, vol. 49(3), pages 1009-1033, August.
- James L. Smith & Rex Thompson, 2006. "Rational Plunging and the Option Value of Sequential Investment The Case of Petroleum Exploration," Working Papers 0602, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- Fissel, Benjamin E & Glibert, Ben, 2010. "Exogenous Productivity Shocks and Capital Investment in Common-pool Resources," University of California at San Diego, Economics Working Paper Series qt1qp1g9ts, Department of Economics, UC San Diego.
- Sweeney, James L., 1993. "Economic theory of depletable resources: An introduction," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 17, pages 759-854 Elsevier.
- Lin, C.-Y. Cynthia, 2007. "The Multi-Stage Investment Timing Game in Offshore Petroleum Production: Preliminary results from an econometric model," Institute of Transportation Studies, Working Paper Series qt70t9n2r3, Institute of Transportation Studies, UC Davis.
- Christoph March, 2011. "Adaptive social learning," PSE Working Papers halshs-00572528, HAL.
- Gale, Douglas, 1996. "What have we learned from social learning?," European Economic Review, Elsevier, vol. 40(3-5), pages 617-628, April.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maureen Chin).
If references are entirely missing, you can add them using this form.