The Two Waves of Voucher Privatization in the Czech Republic: A Model of Learning in Sequential Bidding

CERGE-EI Working Paper Series No. 84

32 Pages Posted: 25 Feb 2014

See all articles by Jan Hanousek

Jan Hanousek

Faculty of Business and Economics, Mendel University in Brno; Centre for Economic Policy Research (CEPR)

Eugene Kroch

Villanova University; University of Pennsylvania

Date Written: June 1, 1995

Abstract

This study develops a dynamic model of bidding behavior to investigate the Czech voucher privatization process, which took place in two waves of bidding rounds, the first in 1992 and the second in 1994. It examines the voucher mechanism from the standpoint of investors and the pricing and allocation of shares. Investors could participate as independent individuals or by assigning some of all of their voucher points to investment privatization funds. Principle findings are that individual participants behaved quite differently from funds and could benefit by learning from one round to the next and from observing the behavior of the funds. An important collateral finding is that the market, though crude, behaved efficiently in the adjustment of share prices over the bidding rounds.

Suggested Citation

Hanousek, Jan and Kroch, Eugene, The Two Waves of Voucher Privatization in the Czech Republic: A Model of Learning in Sequential Bidding (June 1, 1995). CERGE-EI Working Paper Series No. 84, Available at SSRN: https://ssrn.com/abstract=1545010 or http://dx.doi.org/10.2139/ssrn.1545010

Jan Hanousek (Contact Author)

Faculty of Business and Economics, Mendel University in Brno ( email )

Brno
Czech Republic

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Eugene Kroch

Villanova University ( email )

Villanova, PA 19085
United States

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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