The Treasury's Experiment with Single-Price Auctions in the Mid-1970s: Winner's or Taxpayer's Curse?
The Review of Economics and Statistics
1994
This study examines the Treasury's experiment with single-price bond auctions in the mid-1970s and finds that, controlling for factors unrelated to auction technique, markups of auction average rates over when-issued rates shortly after auctions were a statistically significant seven to eight basis points higher at single-price auctions than at discriminating-price auctions. These results suggest that single-price auctions raised Treasury borrowing costs by roughly 3/4 percent of the issuing price of auctioned securities. Copyright 1994 by MIT Press.
- DOI
- 10.2307/2109776
- Volume
- 76 (4)
- Pages
- 754
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