Shortcomings of the Brazilian Pre-Salt Auction Design
Autor(a) principal: | |
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Data de Publicação: | 2016 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Revista Brasileira de Economia (Online) |
Texto Completo: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402016000400379 |
Resumo: | The Brazilian government instituted a new regulatory framework for auctioning pre-salt oil reserves to replace the previous concession regime with a profitshare bidding auction. Motivated by the new rules, we present a model of revenue share bidding auction under affiliation. We prove the existence of monotone pure-strategy equilibrium and characterize its equilibrium bidding function. In addition, we prove that it generates an expected revenue at least as large as the usual bonus bidding auction. Next, we introduce in the model a function representing a royalty rate that is contingent on the value of the object. We suggest instrument improves expected revenue in both models, reducing the gap between them. Analyzing this new regulatory framework from the viewpoint of theoretical and numerical results obtained, we discuss some consequences and argue that the previous regime dominates the new one. |
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Shortcomings of the Brazilian Pre-Salt Auction DesignPre-Salt AuctionProfit Share AuctionSliding ScaleThe Brazilian government instituted a new regulatory framework for auctioning pre-salt oil reserves to replace the previous concession regime with a profitshare bidding auction. Motivated by the new rules, we present a model of revenue share bidding auction under affiliation. We prove the existence of monotone pure-strategy equilibrium and characterize its equilibrium bidding function. In addition, we prove that it generates an expected revenue at least as large as the usual bonus bidding auction. Next, we introduce in the model a function representing a royalty rate that is contingent on the value of the object. We suggest instrument improves expected revenue in both models, reducing the gap between them. Analyzing this new regulatory framework from the viewpoint of theoretical and numerical results obtained, we discuss some consequences and argue that the previous regime dominates the new one.Fundação Getúlio Vargas2016-12-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402016000400379Revista Brasileira de Economia v.70 n.4 2016reponame:Revista Brasileira de Economia (Online)instname:Fundação Getulio Vargas (FGV)instacron:FGV10.5935/0034-7140.20160020info:eu-repo/semantics/openAccessAraujo,AloisioCostellini,ClaraDamé,OtávioMonteiro,Paulo K.eng2017-01-12T00:00:00Zoai:scielo:S0034-71402016000400379Revistahttp://bibliotecadigital.fgv.br/ojs/index.php/rbe/issue/archivehttps://old.scielo.br/oai/scielo-oai.php||rbe@fgv.br1806-91340034-7140opendoar:2017-01-12T00:00Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)false |
dc.title.none.fl_str_mv |
Shortcomings of the Brazilian Pre-Salt Auction Design |
title |
Shortcomings of the Brazilian Pre-Salt Auction Design |
spellingShingle |
Shortcomings of the Brazilian Pre-Salt Auction Design Araujo,Aloisio Pre-Salt Auction Profit Share Auction Sliding Scale |
title_short |
Shortcomings of the Brazilian Pre-Salt Auction Design |
title_full |
Shortcomings of the Brazilian Pre-Salt Auction Design |
title_fullStr |
Shortcomings of the Brazilian Pre-Salt Auction Design |
title_full_unstemmed |
Shortcomings of the Brazilian Pre-Salt Auction Design |
title_sort |
Shortcomings of the Brazilian Pre-Salt Auction Design |
author |
Araujo,Aloisio |
author_facet |
Araujo,Aloisio Costellini,Clara Damé,Otávio Monteiro,Paulo K. |
author_role |
author |
author2 |
Costellini,Clara Damé,Otávio Monteiro,Paulo K. |
author2_role |
author author author |
dc.contributor.author.fl_str_mv |
Araujo,Aloisio Costellini,Clara Damé,Otávio Monteiro,Paulo K. |
dc.subject.por.fl_str_mv |
Pre-Salt Auction Profit Share Auction Sliding Scale |
topic |
Pre-Salt Auction Profit Share Auction Sliding Scale |
description |
The Brazilian government instituted a new regulatory framework for auctioning pre-salt oil reserves to replace the previous concession regime with a profitshare bidding auction. Motivated by the new rules, we present a model of revenue share bidding auction under affiliation. We prove the existence of monotone pure-strategy equilibrium and characterize its equilibrium bidding function. In addition, we prove that it generates an expected revenue at least as large as the usual bonus bidding auction. Next, we introduce in the model a function representing a royalty rate that is contingent on the value of the object. We suggest instrument improves expected revenue in both models, reducing the gap between them. Analyzing this new regulatory framework from the viewpoint of theoretical and numerical results obtained, we discuss some consequences and argue that the previous regime dominates the new one. |
publishDate |
2016 |
dc.date.none.fl_str_mv |
2016-12-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402016000400379 |
url |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402016000400379 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.5935/0034-7140.20160020 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
Fundação Getúlio Vargas |
publisher.none.fl_str_mv |
Fundação Getúlio Vargas |
dc.source.none.fl_str_mv |
Revista Brasileira de Economia v.70 n.4 2016 reponame:Revista Brasileira de Economia (Online) instname:Fundação Getulio Vargas (FGV) instacron:FGV |
instname_str |
Fundação Getulio Vargas (FGV) |
instacron_str |
FGV |
institution |
FGV |
reponame_str |
Revista Brasileira de Economia (Online) |
collection |
Revista Brasileira de Economia (Online) |
repository.name.fl_str_mv |
Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV) |
repository.mail.fl_str_mv |
||rbe@fgv.br |
_version_ |
1754115905902608384 |