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Endogenizing Bidder?s Choice In Financial Assets Auctions ? An Experimental Investigation

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Executive Summary

This paper is to investigate the preferences of potential bidders in choosing between uniform and discriminatory auction pricing methods. Many financial assets, particularly government bonds, are issued in an auction. Uniform and discriminatory pricing constitute the two most popular mechanisms used in public auctions. Theoretical papers have not been able to provide an unequivocal preference of one mechanism over the other. This paper investigates both bidder choice and the impact of that choice on the outcome of the auction by allowing bidders to choose between the two alternative systems.

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