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Competition in Treasury Auctions

Author

Listed:
  • Helmut Elsinger
  • Philipp Schmidt-Dengler

    (WIFO)

  • Christine Zulehner

Abstract

Austria's EU accession led to an increase in the number of banks participating in treasury auctions. We use structural estimates of bidders' private values to examine the effect of increased competition on auction performance. As the results show, increased competition reduces bidder surplus substantially, but less than reduced form estimates would suggest. A significant component of the surplus reduction is due to more aggressive bidding. Counterfactuals establish that as competition increases, concerns regarding auction format play a smaller role.

Suggested Citation

  • Helmut Elsinger & Philipp Schmidt-Dengler & Christine Zulehner, 2016. "Competition in Treasury Auctions," WIFO Working Papers 512, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2016:i:512
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    References listed on IDEAS

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    Cited by:

    1. Samuel Häfner, 2023. "Risk aversion in share auctions: Estimating import rents from TRQs in Switzerland," Quantitative Economics, Econometric Society, vol. 14(2), pages 419-470, May.
    2. Robert Clark & Decio Coviello & Jean-Fran�ois Gauthier & Art Shneyerov, 2018. "Bid Rigging and Entry Deterrence in Public Procurement: Evidence from an Investigation into Collusion and Corruption in Quebec," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(3), pages 301-363.

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    More about this item

    Keywords

    auction format; bidder surplus; competition; independent private values; multi-unit auctions; treasury auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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