Joint Bidding in Federal Offshore Oil and Gas Lease Auctions
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 efficient, incentive compatible cartel and show that it can be implemented by a first-price 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 offshore oil and gas auctions for evidence that cartels used bid coordination schemes. We also examine the determinants of joint bidding.
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- Porter, Robert H, 1995.
"The Role of Information in U.S. Offshore Oil and Gas Lease Auctions,"
Econometric Society, vol. 63(1), pages 1-27, January.
- Robert H. Porter, 1992. "The Role of Information in U.S. Offshore Oil and Gas Lease Auctions," NBER Working Papers 4185, National Bureau of Economic Research, Inc.
- Robert H. Porter, 1992. "The Role of Information in U.S. Offshore Oil and Gas Lease Auctions," Discussion Papers 1008, Northwestern University, Center for Mathematical Studies in Economics and Management Science.