American Economic Review: Vol. 101 No. 5 (August 2011)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


AER - All Issues

AER Forthcoming Articles

Competition among Sellers in Securities Auctions

Article Citation

Gorbenko, Alexander S., and Andrey Malenko. 2011. "Competition among Sellers in Securities Auctions." American Economic Review, 101(5): 1806-41.

DOI: 10.1257/aer.101.5.1806


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)

Article Full-Text Access

Full-text Article

Additional Materials

Online Appendix (107.59 KB)


Gorbenko, Alexander S. (London Business School)
Malenko, Andrey (MIT)

JEL Classifications

D44: Auctions
D82: Asymmetric and Private Information
G10: General Financial Markets: General (includes Measurement and Data)

American Economic Review

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us