What’s that got to do with the price of fish? Buyers behavior on the Ancona fish market

Abstract

a b s t r a c tIn this paper we analyze the Ancona wholesale fish market (MERITAN) where transactions take place in three simultaneous Dutch auctions. Our objective is to characterize the behavior of market participants and, in particular, that of buyers in such a market structure. Our analysis shows that buyer-seller relationships are less important than in a pairwise bargaining market such as the Marseille Fish market but that a significant amount of "loyalty" is still present under the auction mechanism. We provide an explanation of the "declining price paradox" for the fish market of Ancona by linking the rule used by the buyers to set their bid to the relationship between the variation in the price of the last transactions in the day and the quantity of fish available on that day. In fact, the average price tends to increase for the last transactions on days characterized by a limited supply of fish.

Buyer and seller behavior in fish markets organized as Dutch auctions: Evidence from a wholesale fish market in Southern Europe

“…Specifically, the paper finds that price dispersion is common, prices substantially decrease throughout the auction for a number of transaction classes, auctioned cases which contain little quantity of fish fetch a higher price per kg, buyers display nonrandom buying patterns and there is a clear negative relationship between price and the number of buyers. These findings are in accordance with the results of other studies of fish markets (Gallegati et al, 2011;Giulioni and Bucciarelli, 2011a,b).…”

“…The main goal of the sellers who organize a wholesale fish market is to design a mechanism to extract the maximum revenue from buyers (see, for instance, Gallegati et al, 2011). The fundamental revenue equivalence theorem (see Myerson, 1981;Riley and Samuelson, 1981;Vickrey, 1961) tells us that all the so-called standard auctions (ascending, descending, first-price sealed-bid and second-price sealed-bid) as well as many non-standard auctions yield the same expected revenue under some conditions (Klemperer, 1999):…”

“…Consider, for instance, the wholesale fish markets of Pescara Bucciarelli, 2008, 2011a,b) and Ancona (Gallegati et al, 2011), in Italy; Lorient (Guillotreau and Jiménez-Toribio, 2011) and Sete (Gallegati et al, 2011), in France; the Basque Country (García et al, 2010), in Spain; Sidney's Pyrmont (Hickey, 1989), in Australia; Taipei (Crawford and Kuo, 2003), in the Republic of China; or Iceland (Gallegati et al, 2011). In these markets an auction board is usually available in the warehouse where lots are being auctioned.…”

Marine Fisheries and Mariculture in Croatia: Economic and Trade Analysis

“…Since, market conditions determine the price formation and distribution of surplus, in order to obtain better understanding of fishery development in Croatia, it is necessary to explore its exchange of fish products with Italy. Gallegati et al (2011) and Vignes and Etienne (2011) analyzed advanced forms of whole sale fish trading. Highly structured whole-sale market trading nowadays represents a common way of market exchange of fishery product.…”

Learning to bid in sequential Dutch auctions

“…One of the authors has acquired with colleagues, a detailed knowledge of the functioning of the Ancona wholesale fish market (see Gallegati and Gianfranco Giulioni, 2011). This was obtained from discussions and interviews with traders and auctioneers and by observing their modus operandi.…”