Information, Returns, and Bidding Behavior in Ocs Auctions: 1954-1969

This paper examines federal auctions for leases on the Outer Continental Shelf (OCS) in the light of the predictions of the first-price, sealed bid, common values model of auctions. We find that the data strongly support the model for auctions in which one bidder is better informed than the other bi...

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Bibliographic Details
Published in:The Journal of industrial economics 1987-06, Vol.35 (4), p.517-542
Main Authors: Hendricks, Kenneth, Porter, Robert H., Boudreau, Bryan
Format: Article
Language:English
Subjects:
Auctions
Bidding
Bids
Drilling
Economic models
Economic theory
Gross profits
Joint ventures
Leases
Net profits
Oil fields
Oligopoly Pricing
Real estate auctions
Sales distribution
Statistical analysis
Studies
Water wells
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Summary:This paper examines federal auctions for leases on the Outer Continental Shelf (OCS) in the light of the predictions of the first-price, sealed bid, common values model of auctions. We find that the data strongly support the model for auctions in which one bidder is better informed than the other bidders. The evidence for auctions in which bidders have noisy but qualitatively similar information is less conclusive, but is consistent with a model in which each bidder does not know either the actual or potential number of bidders on a lease.
ISSN:0022-1821
1467-6451
DOI:10.2307/2098586