ABSTRACT
This and the following three chapters present an economic analysis of the invited tender-bid auction system as operated by the oil companies in their purchasing relationships with their suppliers in the offshore oil supply industry. These chapters pay attention to bid-price optimization and economic organizational problems in the offshore oil-gathering business (this chapter), optimization of (measurement cost) expenditures on running an invited tender-bid auction (Chapter 9), the role of buyers as market-makers (Chapter 10), and the transactional problems to which product idiosyncrasy and related matters give rise when an organizational form is being chosen (Chapter 10, but more particularly Chapter 12).
