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|Title: ||Endogenizing Bidders Choice in Divisible Goods Auctions|
|Authors: ||Brenner, Menachem|
|Issue Date: ||Oct-2007|
|Series/Report no.: ||FIN-07-011|
|Abstract: ||Many financial assets, especially government bonds, are issued by an auction mechanism.
An important feature of the design is the auction pricing mechanism: Uniform vs.
Discriminatory. Theoretical papers do not provide a definite answer regarding the
preference of one mechanism over the other. Experimental papers investigated the issue
under an exogenous equal number of bidders. We investigate the bidders’ choice and the
impact of that choice on the outcome of the auction by letting them choose between the
two alternative systems. The majority of the bidders in the survey have chosen the
uniform method. Those that prefer the uniform auction bid, on average, more aggressively than those that choose the discriminatory one. On average the revenues to the issuer were higher under the uniform price mechanism.|
|Appears in Collections:||Finance Working Papers|
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