{'fraction_non_alphanumeric': 0.018558172733761598, 'fraction_numerical': 0.0053533190578158455, 'mean_word_length': 5.3560090702947845, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Uniform-Price Auctions: Evaluation of the Treasury Experience

Executive Summary The Treasury's purpose in conducting uniform-price auctions is to determine whether the uniform-price auction technique reduces the Treasury's financing costs compared with multiple-price auctions, by encouraging more aggressive bidding by participants, and whether it broadens participation and reduces concentration of securities on original issue. Thus, the evaluation has focused on the impact on revenues and the breadth of initial distribution of awards. In addition to auction technique, a constellation of other factors also affects auction results, such as the economic outlook, expectations for movements in absolute or relative interest rates, and any other factors affecting the portfolio decisions of dealers and investors. For example, the Treasury auction process has undergone regulatory and other changes that may also have had an impact on bidding strategies and trading practices of market participants. The confluence of these and other factors produces significant auction-to-auction volatility in the data, making it difficult to isolate the impact of auction technique itself. Our methodology was to compare auction results and WI market trading patterns for the 2-year and 5-year notes under the uniform-price and multiple-price techniques. We then examined whether any differences in performance are consistent with the purpose of conducting uniform-price auctions and whether the differences are consistent with the predictions of auction theory. Impacts on the Distribution of Awards Some economists contend that uniform-price auctions will encourage more bidders to participate in competitive bidding than do multiple-price auctions by reducing the importance of specialized knowledge regarding market demand and the information costs associated with its collection. A corollary to increased participation is a reduction in the concentration of awards. We found no significant change in awards to the primary dealer community as a whole, but we found statistically significant evidence that the concentration of awards to the top primary dealers for their own accounts has been reduced. The average share of awards of 2-year notes to the top five and top ten dealers declined, with the reductions ranging from about 5 percent to 15 percent. By contrast, the shares to the top dealers in 3-year and 10-year note multiple-price auctions either remained essentially the same or increased significantly. The shares of awards to dealers plus their large customers displayed essentially the same pattern as awards for dealers' own accounts. Also, awards for large customers alone increased, from about 17 percent to 25 percent for both the 2-year and 5-year notes, suggesting greater participation …