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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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