Article ID: | iaor20031976 |
Country: | United States |
Volume: | 50 |
Issue: | 6 |
Start Page Number: | 1068 |
End Page Number: | 1072 |
Publication Date: | Nov 2002 |
Journal: | Operations Research |
Authors: | Gerchak Yigal, Fuller J. David, He Qi-Ming, Chungcharoen Ekachidd |
Keywords: | exploration |
Consider a basin with remaining undiscovered fields, in which both field sizes and their number are uncertain. Assuming that the probability of finding a field is increasing in its size, we show that the expected size of the first remaining field discovered, which is of particular importance, is increasing in the variability of field sizes, and results from a simulation model of exploration illustrate this trend for the first several fields discovered. We also provide simple bounds on the expected size of the first field discovered. It seems that more information (less variability) leads to less value – something unexpected. We explore and explain this seemingly counterintuitive result.