Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment

Klenio Barbosa, Dakshina De Silva, Liyu Yang and Hisayuki Yoshimoto

American Economic Journal: Microeconomics, 2022, vol. 14, issue 4, 394-419

Abstract: This paper exploits a large-scale 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 price or discriminatory price auction mechanisms. Based on the outcomes of more than 300 treasury securities issued through an alternating auction-rule market experiment, we find that yield rates of the two auction formats are not statistically different. Further, these estimates indicate there is no significant economic difference in terms of revenue between the two auction mechanisms. This result is robust across different bond yield-rate measurements and participation behavior.

JEL-codes: D44 E63 G12 O16 P34 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1257/mic.20200216

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