ABSTRACT
Joint ventures are difficult to characterize in general since they form for many and varied reasons. Each joint venture's behavior also depends, of course, on the characteristics of its member firms. Joint venture bidding enables oil companies to become stronger competitors in offshore oil and gas leasing sales, through the pooling of such things as capital, information, technical knowledge and equipment, costs and risks. If each bidder takes its opponents behavior as fixed, there exists a Nash, or non-cooperative equilibrium set of bids in both the symmetric and asymmetric information cases. From interviews with representatives of the oil industry, and examination of the patterns of joint venture bidding in offshore sales, pure bidding joint ventures were defined to include all joint ventures having at least one of the seven largest oil companies as a member. To properly explore the relationship between number of bidders and winning bid level requires some independent measure of tract quality.
