Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment
41 Pages Posted: 20 Jun 2019
Date Written: June 14, 2019
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: Suggested Citation