Auction Format Matters: Evidenceon Bidding Behavior and Seller Revenue

IMF Working Papers, May 1, 1995

Source details

Canonical URL: Auction Format Matters: Evidenceon Bidding Behavior and Seller Revenue

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Bibliographic details

Authors: Robert A Feldman, Vincent Reinhart
Published: May 1, 1995
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9781451846607.001

Authors and Publication

Robert A Feldman, Vincent Reinhart
May 1, 1995
IMF Working Papers, Working Paper No. 1995/047, Volume: 1995, Issue: 047, Pages: 30
DOI: https://doi.org/10.5089/9781451846607.001
Stock No: WPIEA0471995
ISBN: 9781451846607
ISSN: 1018-5941

Research Question and Scope

Evaluates the importance of auction format on bidding behavior and seller revenue.
Focuses on differences in performance under uniform-price and discriminatory-price formats.
Applies a standard benchmark model to data from the IMF gold auctions run in 1976-80.

Methodology and Theoretical Framework

Uses a standard benchmark model to derive empirically-testable hypotheses on the optimal amount of bid shading that generates revenue equivalence between uniform-price and discriminatory-price formats.
Empirical application: IMF gold auctions data (1976-80).

Key Findings

Evidence of statistically significant shading in excess of the theoretically-derived optimum under the discriminatory format.
This evidence suggests greater seller revenue under the uniform-price format.

Subject Areas and Keywords

Subject: Commodities, Commodity markets, Financial markets, Gold, Gold prices, Prices
Keywords: auction format, Central and Eastern Europe, Commodity markets, discriminating-price auction, discriminatory-price auction, Gold, Gold prices, price, uniform-price auction, uniform-price format, WP

Notable Publication Details

Also published in Staff Papers, Vol. 43, No. 2, June 1996.
Available in IMF eLibrary formats.

IMF Working Paper — Auction Format Matters: Evidenceon Bidding Behavior and Seller Revenue