IDEAS home Printed from
   My bibliography  Save this article

Auction Format Matters: Evidence on Bidding Behavior and Seller Revenue


  • Robert A. Feldman

    (International Monetary Fund)

  • Vincent Reinhart

    (International Monetary Fund)


This paper evaluates the importance of auction format on bidding behavior and seller revenue, focusing on differences in performance under uniform-price and discriminatory-price formats. The analysis is based on a standard benchmark model from which empirically testable hypotheses are derived on the optimal amount of bid shading that generates revenue equivalence between the two formats. Applying this model to data from the IMF gold auctions run in 1976-80, we find evidence of statistically significant shading in excess of the theoretically derived optimum under the discriminatory format. This evidence suggests greater seller revenue under the uniform-price format.

Suggested Citation

  • Robert A. Feldman & Vincent Reinhart, 1996. "Auction Format Matters: Evidence on Bidding Behavior and Seller Revenue," IMF Staff Papers, Palgrave Macmillan, vol. 43(2), pages 395-418, June.
  • Handle: RePEc:pal:imfstp:v:43:y:1996:i:2:p:395-418

    Download full text from publisher

    File URL:
    File Function: main text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Carmen M. Reinhart & Vincent R. Reinhart, 1991. "Output Fluctuations and Monetary Shocks: Evidence from Colombia," IMF Staff Papers, Palgrave Macmillan, vol. 38(4), pages 705-735, December.
    3. Rodriguez, Carlos Alfredo, 1982. "The Argentine stabilization plan of December 20th," World Development, Elsevier, vol. 10(9), pages 801-811, September.
    4. Sergio Rebelo & Carlos A. Vegh, 1995. "Real Effects of Exchange-Rate-Based Stabilization: An Analysis of Competing Theories," NBER Chapters,in: NBER Macroeconomics Annual 1995, Volume 10, pages 125-188 National Bureau of Economic Research, Inc.
    5. repec:nbr:nberre:0126 is not listed on IDEAS
    6. Taylor, John B, 1980. "Aggregate Dynamics and Staggered Contracts," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 1-23, February.
    7. Reinhart, Carmen M. & Vegh, Carlos A., 1995. "Nominal interest rates, consumption booms, and lack of credibility: A quantitative examination," Journal of Development Economics, Elsevier, vol. 46(2), pages 357-378, April.
    8. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    9. Helpman, Elhanan & Razin, Assaf, 1987. "Exchange Rate Management: Intertemporal Tradeoffs," American Economic Review, American Economic Association, vol. 77(1), pages 107-123, March.
    10. Reinhart, Carmen & Reinhart, Vincent, 1991. "Output Fluctuations and Monetary Shocks: Evidence from Colombia," MPRA Paper 6980, University Library of Munich, Germany.
    11. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Osório-Peters, Suhita, 1998. "Die Reform der EU-Marktordnung für Bananen: Lösungsansätze eines fairen Handels unter Berücksichtigung der Interessen von Kleinproduzenten," ZEW Dokumentationen 98-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Walter Orellana Rocha & Bernardo X. Fernández Tellería & Vladimir Fernández Quiroga, 2006. "Subasta electrónica interactiva y subasta a sobre cerrado: Un análisis comparativo de los resultados en Bolivia," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 9(1), pages 65-113, December.
    3. Sara Castellanos, 2001. "Mexican treasury securities primary auctions," Theory workshop papers 357966000000000025, UCLA Department of Economics.
    4. Osório-Peters, Suhita, 1998. "The goals of sustainable development and the reform of the EU banana trade regime: a discussion of different trade instruments," ZEW Discussion Papers 98-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Rodolfo Guerrero & José Luis Negrín, 2006. "Eficiencia del sistema bancario mexicano 1997-2004: una estimación dinámica," Monetaria, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 235-259, julio-sep.
    6. Sara Castellanos, 2001. "A New Empirical Study of the Mexican Treasury Securities Primary Auctions: Is there more underpricing?," Levine's Working Paper Archive 625018000000000206, David K. Levine.
    7. Paul Castillo & Carlos Montoro & Vicente Tuesta, 2006. "Estimación de la tasa natural de interés para la economía peruana," Monetaria, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 261-298, julio-sep.

    More about this item

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:imfstp:v:43:y:1996:i:2:p:395-418. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.