Because natural resource exploration and development are inherently risky undertakings, information can be a valuable commodity in these processes.
A survey of the literature concerning information and resources is contained in Chapter 1, and the areas of interest for this thesis are introduced.
Aspects of the role of information early in the exploration process are considered in Chapter 2, as the public and private provision and valuation of exploratory information are examined. The role of information in market performance is not independent of the allocation institutions under consideration, so several are examined. Furthermore, the role of publicly provided information as a remedy for problems in information provision is critically evaluated. It is shown that if the publicly provided information is not perfect, its potential for eliminating, or even reducing, private overvaluation can not be assured.
Next, in Chapter 3, consequences of the joint provision of resources and information are examined in the context of problems of information inexcludability. This essay presents the case in which more than one firm owns land in a geologically related area. Each firm can provide valuable information to the other, and each firm recognizes this predicament. The problem is developed first as one of noncooperative play of a two person game, with particular attention then given to the theory and performance of cooperative institutions for sharing the resource,information. This essay is not merely an abstract conjecture, for such cooperative institutions are quite common in the oil industry.
Finally, in Chapter 4, the observation that information is a valuable commodity in natural resource markets is once again combined with the fact that such information is often produced jointly with the oil and gas product to demonstrate that price controls on petroleum properties can produce unintended results. This follows from the alteration in firm optimal extraction paths when price controls are present.
