Collusion in Uniform-Price Auctions: Experimental Evidence and Implications for Treasury Auctions

Noe, Thomas, Rebello, Michael and Goswami, Gautam (1996) Collusion in Uniform-Price Auctions: Experimental Evidence and Implications for Treasury Auctions. Review of Financial Studies, 9 (3). pp. 757-785.

Abstract

We provide experimental evidence that nonbinding preplay communication between bidders in auctions of shares facilitates the adoption of equilibrium strategies: collusive strategies in uniform-price auctions, and the unique equilibrium in undominated strategies in discriminatory auctions. When communication between bidders is introduced, clearing prices and auctioneer profits in uniform-price auctions fall below those observed in discriminatory auctions. This evidence suggests that uniform-price auctions of Treasury securities may result in lower revenues than the currently employed discriminatory procedure.

Item Type: Article
Keywords: price fixing; auctions; finance
Subject(s): Finance
Date Deposited: 10 Nov 2011 15:17
Last Modified: 24 Sep 2018 15:15
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/1133

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