Asset Auctions, Information and Liquidity
Posted: 11 Feb 2010
There are 3 versions of this paper
Asset Auctions, Information, and Liquidity
Asset Auctions, Information, and Liquidity
Date Written: October 1, 2009
Abstract
A model is presented of a uniform price auction where bidders compete in demand schedules; the model allows for common and private values in the absence of exogenous noise. It is shown how private information yields more market power than the levels seen with full information. Results obtained here are broadly consistent with evidence from asset auctions, may help explain the response of central banks to the crisis and suggest potential improvements in the auction formats of asset auctions.
Keywords: Adverse selection, market power, reverse auctions, bid shading
JEL Classification: D44, D82, G14, E58
Suggested Citation: Suggested Citation
Xavier Vives (Contact Author)
University of Navarra - IESE Business School ( email )
Avenida Pearson 21
Barcelona, 08034
Spain
HOME PAGE: http://wwwapp.iese.edu/faculty/facultyDetail.asp?lang=en&prof=xv
CESifo (Center for Economic Studies and Ifo Institute for Economic Research) ( email )
Poschinger Str. 5
Munich, DE-81679
Germany
European Corporate Governance Institute (ECGI)
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium