The Spanish Auction for Government Securities: A Laboratory Analysis
AbstractUpdated - please see paper 551.02 in this series. The Bank of Spain uses a unique auction format to sell government bonds, which can be seen as a hybrid of a uniform and a discriminatory auction. For winning bids above the average winning bid, buyers are charged the average winning bid, otherwise they pay their respective bids. We report an experiment that compares this auc-tion format to the discriminatory format used in most other countries. We use a common value model with multi-unit supply and two-unit demand. The results show significantly higher revenue with the Spanish format, while volatility of prices over time is lower with the discriminatory format. Our data also exhibit the use of bid-spreading strategies.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 482.02.
Date of creation: 01 Mar 2001
Date of revision:
Treasury; Spanish auctions; discriminatory auctions; multi-unit demand; common values; experimental econom-ics;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
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- Abbink, Klaus & Brandts, Jordi & McDaniel, Tanga, 2003.
"Asymmetric Demand Information in Uniform and Discriminatory Call Auctions: An Experimental Analysis Motivated by Electricity Markets,"
Journal of Regulatory Economics,
Springer, vol. 23(2), pages 125-44, March.
- Klaus Abbink & Jordi Brandts & Tanga McDaniel, 2002. "Asymmetric demand information in uniform and discriminatory call auctions: an experimental analysis motivated by electricity markets," UFAE and IAE Working Papers 520.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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