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Competition in Austrian Treasury Auctions

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  • Zulehner, Christine
  • Elsinger, Helmut
  • Schmidt-Dengler, Philipp

Abstract

We investigate the role of competition on the outcome of Austrian Treasury auctions. EU accession by Austria provides a natural experiment causing an exogenous increase in the number of bidders in Treasury Auctions. Difference-in-difference estimates suggest that the increased number in bidders caused a significant drop in the yields Austria had to pay for newly issued debt. We use structural estimates of bidders private values to examine the effect of increased competition on auction revenue. We compare bidder surplus before and after the auction. We find a small effect on the the surplus earned by bidders as a result of increased competition.

Suggested Citation

  • Zulehner, Christine & Elsinger, Helmut & Schmidt-Dengler, Philipp, 2013. "Competition in Austrian Treasury Auctions," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79963, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc13:79963
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    References listed on IDEAS

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    1. Ali Hortaçsu & Jakub Kastl, 2012. "Valuing Dealers' Informational Advantage: A Study of Canadian Treasury Auctions," Econometrica, Econometric Society, vol. 80(6), pages 2511-2542, November.
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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