Competition among Sellers in Securities Auctions
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Malenko_Competition among.pdf
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Author(s)
Gorbenko, Alexander S.
Malenko, Andrey
Date Issued
August 2011
Journal
American Economic Review
Publisher
American Economic Association
Citation
Gorbenko, Alexander S, and Andrey Malenko. “Competition Among Sellers in Securities Auctions.” American Economic Review 101.5 (2011): 1806–1841.
Version
Final published version
Abstract
We study simultaneous security-bid second-price auctions with competition among sellers for potential bidders. The sellers compete by designing ordered sets of securities that the bidders can offer as payment for the assets. Upon observing auction designs, potential bidders decide which auctions to enter. We characterize all symmetric equilibria and show that there always exist equilibria in which auctions are in standard securities or their combinations. In large markets the unique equilibrium is auctions in pure cash. We extend the model for competition in reserve prices and show that binding reserve prices never constitute equilibrium as long as equilibrium security designs are not call options. (JEL D44, D82, G10)
MIT Department
Sloan School of Management
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.101.5.1806
