Skip to main content
Unpublished Paper
Auctioning Securities
Working Paper, University of Maryland (1998)
  • Peter Cramton, University of Maryland
  • Lawrence M. Ausubel, University of Maryland

Treasury debt and other divisible securities are traditionally sold in either a pay-your-bid (discriminatory) auction or a uniform-price auction. We compare these auction formats with a Vickrey auction and also with two ascending-bid auctions. The Vickrey auction and the alternative ascending-bid auction (Ausubel 1996) have important theoretical advantages for sellers. In a setting without private information, these auctions achieve the maximal revenue as a unique equilibrium in dominant strategies. In contrast, the pay-your-bid, uniform-price, and standard ascending-bid auction admit a multiplicity of equilibria that yield low revenues for the seller. We show how these results extend to a setting where bidders have affiliated private information. Our results question the standard ways that securities are offered to the public.

Publication Date
March, 1998
Citation Information
Peter Cramton and Lawrence M. Ausubel. "Auctioning Securities" Working Paper, University of Maryland (1998)
Available at: