Why Government Bonds Are Sold by Auction and Corporate Bonds by Posted-Price Selling

This paper establishes the result that the seller prefers posted-price selling when the cost of information acquisition is high, and auctions when it is low. We view corporate bonds as an instance of the former case, and government bonds as an instance of the latter.

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Year of publication:	2003-03-01
Authors:	Habib, Michel A. ; Ziegler, Alexandre
Publisher:	International Center for Financial Asset Management and Engineering (FAME) <Genf>
Subject:	Transaktionskosten \| Staatsanleihe \| Informationskosten \| Auktionsbörse

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1. Second-Price auctions
2. Posted-price selling
3. Auctions and posted-price selling compared
4. An example
5. Implications for initial public offerings
6. Conclusion

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