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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26454
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| Title: | Auctioning Sovereign Bonds: A Global Cross-Section Investigation of the
Price Mechanism |
| Authors: | Brenner, Menachem
Galai, Dan
Sade, Orly |
| Issue Date: | Aug-2007 |
| Series/Report no.: | FIN-05-045 |
| Abstract: | Many financial assets, especially government bonds, are issued by an
auction. An important feature of the design is the auction pricing
mechanism: Uniform vs. Discriminatory. Theoretical papers do not provide
a definite answer regarding the dominance of one type of auction over
the other. We investigate the revealed preferences of the issuers by
surveying the sovereign issuers that conduct auctions. We find that the
majority of the issuers/countries in our sample use a discriminatory
auction mechanism for issuing government debt securities. We use a
multinomial logit procedure and discriminatory analysis to investigate
the mechanism choice. It was interesting to find that market oriented
economies and those that practice Common law tend to use a uniform
method while economies who are less market oriented and practice Civil
law tend to use discriminatory price auctions. |
| URI: | http://hdl.handle.net/2451/26454 |
| Appears in Collections: | Finance Working Papers
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