Decision Sciences
4 years ago

German Treasury auctions favor sellers, leaving bidders uncertain and profitless.

RePEc: Research Papers in Economics
Discriminatory auctions with seller discretion: evidence from German treasury auctions
Jörg Rocholl

Paper Summary

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The study looked at German Treasury auctions from 1998 to 2002 to see how the seller's choices affected auction results. The seller often used its discretion to set prices close to market values, not just to make the most money. Bidders didn't usually make profits, and their strategies showed they were unsure due to the seller's decisions. The findings support the idea that auction prices are based on the seller's costs, not just what bidders offer.