Auction mechanisms and treasury revenue: evidence from the Chinese experiment

Barbosa, K., De Silva, D. G., Yang, L. and Yoshimoto, H. (2022) Auction mechanisms and treasury revenue: evidence from the Chinese experiment. American Economic Journal: Microeconomics, 14(4), pp. 394-419. (doi: 10.1257/mic.20200216)

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.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Yoshimoto, Dr Hisayuki
• Authors: Barbosa, K., De Silva, D. G., Yang, L., and Yoshimoto, H.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: American Economic Journal: Microeconomics
• Publisher: American Economic Association
• ISSN: 1945-7669
• ISSN (Online): 1945-7685
• Copyright Holders: Copyright © 2022 American Economic Association
• First Published: First published in American Economic Journal: Microeconomics 14(4): 394-419
• Publisher Policy: Reproduced in accordance with the publisher copyright policy
• Data DOI: 10.3886/E132983V1