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(Solved): You are the manager of an oil exploration company. You have won an auction for a potential oil field ...



You are the manager of an oil exploration company. You have won an auction for a potential oil field that is immediately adjacent to a field owned by a competitor. You are considering whether to test drill on your field when your​ competitor's managers announce plans to test drill on their field very near your property. Your​ competitor's cheap talk to test drill on​ his/her field will be ▼ . Which of the following statements is a reason for​ this? A. Your competitor will not be able to gauge the amount of oil on their field if you decide to test​ drill, and they will not be able to plan further. B. The test results will be more valuable to you than to your​ competitor, so your competitor may not follow through on the announcement. C. Your competitor gains by choosing not to drill if you choose not to test drill in response to your​ competitor's announcement. D. The amount of oil on both the fields will probably be correlated and hence your competitor will choose to drill even if you choose to not drill.



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