We investigate the role of competition on the outcome of Austrian Treasury auctions. Austria's EU accession led to an increase
in the number of banks participating in treasury auctions. We use structural estimates of bidders' private values to examine
the effect of increased competition on auction performance. We find robust evidence that bidders' surplus dropped sharply
after EU accession, but less than reduced form estimates would suggest. The difference can be explained by reduced form estimates
not taking into account the increase in valuations upon EU accession.
Research group:Labour Economics, Income and Social Security