Mineral Rights Auction’s Valuation Paradigms: Case Study, The Gulf of Mexico

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Yadegari, Ali | 2020

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 53545 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Fatemi Ardestani, Farshad
Abstract:
Auction literature and economic theories advocate common valuation among bidders in mineral rights auctions. In this study, we have tried to examine the assumption of common valuation between bidders in a first price sealed bid auction. It examines the common valuation hypothesis by assuming the information symmetry and the exogenous entry of bidders. The findings of this study suggest that bidders’ valuation in a first price sealed bid auction of natural resources may be private or common value. We use the non-parametric estimation model to find that after the federal government imposed Area-wide Leasing in the Gulf of Mexico, bidders’ valuations changed from private valuation to common valuation, and the winner’s curse decreased significantly after the extensive lease
Keywords:
Non-Parametric Estimation ; Auction ; First Price Sealed Bid Auction ; Bidders Valuation ; Winner’s Curse ; Area-Wide Leasing