Uniform-price auctions outperform discriminatory auctions in securities sales, benefiting Treasury.
The article compares two common auction methods for selling securities: discriminatory and uniform-price auctions. Different models show varying results for expected revenue, but all reveal a link between bids and auction type. Real-world evidence suggests that uniform-price auctions are more beneficial for the Treasury. Despite this, most government bond issuers and central banks still use discriminatory-price auctions due to other factors besides revenue.