How Best to Auction Oil Rights
Peter Cramton ()
Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton
I study the design of oil rights auctions. A good auction design promotes both an efficient assignment of rights and competitive revenues for the seller. The structure of bidder preferences and the degree of competition are key factors in determining the best design. With weak competition and additive values, a simultaneous first-price sealed-bid auction may suffice. With more complex value structures, a dynamic auction with package bids, such as the clock-proxy auction, likely is needed to promote the efficiency and revenue objectives. Bidding on production shares, rather than bonuses, typically increases government take by reducing oil company risk.
Keywords: Auctions; Oil Auctions; Market Design; Clock Auctions (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene and nep-gth
Date: 2005, Revised 2005
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Published in Macartan Humphreys, Jeffrey Sachs, Joseph Stiglitz, eds., Escaping the Resource Curse, forthcoming, 2006.
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Persistent link: https://EconPapers.repec.org/RePEc:pcc:pccumd:06oil
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