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We include in f (F) in the ECM model (5) of Section 4. 1, a dummy variable which captures the change in auction regime CDUMdutch is equal to 0 for the competitive auctions and to I for the discriminatory auctions). Referring to the empirical specification, the null hypothesis for revenue equivalence is then Hn 6: = 0 in the long-run equilibrium term of the empirical specification (equation (6)).f The test compares the average level of the clearing price of a series of competitive auctions with the average clearing price of a set of discriminatory auctions. If revenue equivalence holds, the dummy variable indicating the change of regime is not expected to be significant. If the dummy is significant and positive this indicates that the Dutch auction is revenue-superior. If the dummy is significant and negative this indicates that the competitive auction is revenue-superior. We consider that this method of testing for revenue equivalence improves on an earlier analysis of this question for the foreign exchange auction in Za:mbia.' As discussed in section 4.1, the DUMdutch dummies are significant for both Zambiae and Nigeria, indicating that revenue-equivalence does not obtain in these repeated, multi-unit auctions. For Nigeria, the Dutch auction is revenue-superior, while in Zambia, the competitive auction dominates. There are no theoretical results for revenue equivalence in repeated, multi-unit auctions. The important result here is that a dynamic empirical framework for repeated multi-unit auctions in two different countries found departures from revenue equivalence depending on the relevance of underlying assumptions on bidder valuations, risk-aversion and competitiveness. The theory (section 2.2) suggests that affiliation of bidders' values may explain the results in Zambia: bids were published for most of the auction, and this public information would have figured in bidders' exchange rate forecasts. For Nigeria's wholesale auction, controlling for the number of bids and rules affecting bidder participation, it appears that collusive behaviour by the small number of banks, largely state-owned, could explain the result of Dutch-dominance. High risk-aversion is not a convincing explanation for the Nigerian result, since banks were guaranteed a minimum allocation. On the strength of these two results, there appears to be no clear33 It is important to note that we are not testing for equivalence of the average change in die exchange rate across regimes: the left-hand variable in the long-run equation is the level of the equilibrium auction rate.

Te first-ever test of the (weak) revenue equivalencehypodtis employing acual auction dat from a repeated mulli-mt auction is found in Tenorio (1993). He regresses the level of the auction-determined rate in Zambia on autoregssive terms in the dependent variable, a trend term to capture any non-statonarity, controls for the supply and demand variables, and includes an auction dumMny term, which equals O during the conmettive auction and I for the Dutch auction. However, the dynanics in this analysis are very restrictive, including lags of the dependent variable, but without good reason excluding a nori all lagged fundamentals. The non-stationarity of the regressors was not tested for, and a general time tend was employed to capture non-stationarities. This is unnecessarily restrictive since the bubbles and expectational responses implied by normality and stationarity tests are extremely unlikely to follow an infiniite linear trend. The persistence in the rate is shcOwn by huge coefficients for the lagged rate. with all other variables insignificant save the trend and dummies.

5 Note that the same result (with a different magnitude of the coefficient) was achieved by Tenoio (1993) for Zambia. though in the context of poorly deternmned equations (see earlier footnote).