Auctions: Theory and Possible Applications to Economies in Transition

February 1, 1993

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A major effort is taking place in many parts of the world to establish market-oriented institutions, a development that is particularly evident in the context of the transforming economies in Eastern Europe and the republics of the former Soviet Union. Against this background, this paper assesses various auction techniques to price and allocate government securities, refinance credit, foreign exchange, and state assets in the context of privatization programs. Before making our recommendations on the appropriate format for auctioning these items, the paper explains basic auction formats and assesses the advantages and disadvantages of these formats drawing on the existing, and mostly theoretical, literature.

Subject: Credit, Financial institutions, Foreign exchange, Government securities, Institutional arrangements for revenue administration, Money, Revenue administration, Securities

Keywords: auction format, auction mechanism, auction participant, auction technique, auctions literature, bid auction, Credit, Eastern Europe, Government securities, Institutional arrangements for revenue administration, marginal-price auction, mechanisms concern, price dampening effect, sealed-bid auction, second-price auction, Securities, uniform price auction, uniform-price auction, WP

Pages:
32
Volume:
1993
DOI:
https://doi.org/10.5089/9781451842838.001
Issue:
012
Series:
Working Paper No. 1993/012
Stock No:
WPIEA0121993
ISBN:
9781451842838
ISSN:
1018-5941

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Notes

Assesses various auction techniques to price and allocate government securities, refinance credit, foreign exchange, and state assets in the context of privatization programs. Also published in Staff Papers, Vol. 40, No. 3, September 1993.

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