Auctions for government securities: A laboratory comparison of uniform, discriminatory and Spanish designs

The Bank of Spain uses a unique auction format to sell government bonds that can be seen as a hybrid of a uniform and a discriminatory auction. For winning bids above the average winning bid, buyers are charged the average winning bid; otherwise they pay their respective bids. We use experiments to compare this auction format to the discriminatory format used in most other countries and to the uniform format. Our design is based on a common value model with multi-unit supply and 2-unit demand. The Spanish and the uniform auctions raise significantly higher revenue than the discriminatory auction.