Asset Auctions, Information, and Liquidity
20 Pages Posted: 22 Jan 2010
There are 3 versions of this paper
Asset Auctions, Information, and Liquidity
Asset Auctions, Information, and Liquidity
Asset Auctions, Information and Liquidity
Date Written: January 2010
Abstract
A model is presented of a uniform price auction where bidders compete in demand schedules; the model allows for common and private values in the absence of exogenous noise. It is shown how private information yields more market power than the levels seen with full information. Results obtained here are broadly consistent with evidence from asset auctions, may help explain the response of central banks to the crisis, and suggest potential improvements in the auction formats of asset auctions.
Keywords: adverse selection, market power, reverse auctions, bid shading
JEL Classification: D44, D82, G14, E58
Suggested Citation: Suggested Citation
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