Most have a spatial component
what are the costs of this technology?
how did firms learn where the good formations were and how to drill them efficiently?
with Thom Covert (link)
Individuals own the minerals, but to monetize need to partner with an oil company.
These companies much more informed about value.
Economic theory suggests using an auction, but in practice most people "negotiate"
We estimate how much money negotiations leave on the table using a "natural experiment" in Texas
Public school lands sold prior to 1919 negotiated.
Rest auctioned centrally.
Also used machine learning to group leases
Challenge: finding reasonable buffers/ rules for trading off between Type I and Type II errors
For typical lease, this is approx $200K
Used both ArcGIS and R
Curse of dimensionality in spatial data
Putting wells in 10K leases takes a day on server