ABSTRACT
This chapter examines simple descriptions of auction organization and discusses in more detail two specific proposals for reform of the auction process. There have been many important contributions to the academic literature on auctions, including early efforts by William Vickrey and Milton Friedman, as well as significant later work by Paul Milgrom, among others. William Vickrey originated the standard auction taxonomy, classifying auction types based on the order in which prices were quoted, as well as the auction forum. Friedman argues that the current Treasury technique reduces demand at auctions, as well as making it more price sensitive relative to the demand of the ultimate buy-and-hold investor. The chapter summarizes the methods of sale of central government securities in the Organization for Economic Cooperation and Development (OECD) countries. Bidders in Treasury auctions can submit tenders through the Federal Reserve banks and branches or directly to the Treasury's Bureau of the Public Debt.
