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The Cost of OCS Bid Rejection

Abstract:
The U.S. Interior Department periodically offers Outer Continental Shelf (OCS) tracts for lease at seated bid auction. The bid variable typically is the bonus, a sum paid by the lessee at commencement of the lease. A tract is awarded only to the high bidder. However, the seller often deems even the high bid insufficient, rejecting it and withholding the tract for possible laterauction.

Purchase ( $25 )

Energy Specializations: Petroleum – Exploration and Production

JEL Codes: D44: Auctions, C70: Game Theory and Bargaining Theory: General, C72: Noncooperative Games, Q20: Renewable Resources and Conservation: General, Q21: Renewable Resources and Conservation: Demand and Supply; Prices, Q41: Energy: Demand and Supply; Prices

Keywords: Oil exploration, Outer continental shelf, US, Bid rejection, Oil leases

DOI: 10.5547/ISSN0195-6574-EJ-Vol7-No1-6

Published in Volume 7, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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