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Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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<mark>Journal publication date</mark>30/11/2022
<mark>Journal</mark>American Economic Journal: Microeconomics
Issue number4
Volume14
Number of pages26
Pages (from-to)394-419
Publication StatusPublished
<mark>Original language</mark>English

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 yield rates of the two auction formats are not statistically different. Further, these estimates indicate that 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.

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Permission to make digital or hard copies of part or all of American Economic Association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights for components of this work owned by others than AEA must be honored. Abstracting with credit is permitted.