Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment

41 Pages Posted: 20 Jun 2019

See all articles by Klenio Barbosa

Klenio Barbosa

SKEMA Business School; affiliation not provided to SSRN

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Liyu Yang

Department of Economics, Lancaster University Management School

Hisayuki Yoshimoto

University of Glasgow - Adam Smith Business School

Date Written: June 14, 2019

Abstract

This paper exploits a large-size auction experiment conducted by two Chinese Government Treasury security issuers---the Chinese Development Bank and the Export-Import Bank---to investigate whether Treasury securities should be sold through uniform or discriminatory auction mechanisms. Based on the outcomes of more than 300 Treasury securities issued through an alternating auction-rule market experiment, we find that auction outcome yield rates of the two auction formats are not statistically different, suggesting revenue equivalence. This equivalence is robust across different revenue measurements and participation behavior.

Keywords: Treasury Security Auctions; Discriminatory Auctions; Uniform Auctions; Revenue Equivalence

JEL Classification: C57, C58, D44

Suggested Citation

Barbosa, Klenio and De Silva, Dakshina G. and Yang, Liyu and Yoshimoto, Hisayuki, Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment (June 14, 2019). Available at SSRN: https://ssrn.com/abstract=3404370 or http://dx.doi.org/10.2139/ssrn.3404370

Klenio Barbosa

SKEMA Business School

60, rue Fedor Dostoïevski
Sophia Antipolis, Alpes-Maritimes 06600
France

affiliation not provided to SSRN

Dakshina G. De Silva (Contact Author)

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Liyu Yang

Department of Economics, Lancaster University Management School ( email )

United Kingdom
07719714803 (Phone)

Hisayuki Yoshimoto

University of Glasgow - Adam Smith Business School ( email )

Glasgow
United Kingdom

HOME PAGE: http://hisayukiyoshimoto.org/

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