Competition in treasury auctions

Helmut Elsinger, Philipp Schmidt-Dengler, Christine Zulehner

We investigate the role of competition on the outcome of Austrian Treasury auctions. Austria’s EU accession led to an increase in the number of banks participating in treasury auctions. We use structural estimates of bidders’ private values to examine the effect of increased competition on auction performance: We find that increased competition reduced bidder surplus substantially, but less than reduced form estimates would suggest. A significant component of the surplus reduction is due to more aggressive bidding. Counterfactuals establish that as competition increases, concerns regarding auction format play a smaller role.

Department of Economics
External organisation(s)
Johann Wolfgang Goethe-Universität Frankfurt am Main, Österreichische Nationalbank
No. of pages
Publication date
Austrian Fields of Science 2012
502013 Industrial economics, 502021 Microeconomics
Portal url