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The declining price anomaly in sequential auctions of identical commodities with asymmetric bidders: empirical evidence from the Nephrops norvegicus market in France

Author

Listed:
  • Frédéric Salladarré

    (IUT Rennes - Institut Universitaire de Technologie - Rennes - UR - Université de Rennes, UR - Université de Rennes, CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Patrice Guillotreau

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

  • Patrice Loisel

    (MISTEA - Mathématiques, Informatique et STatistique pour l'Environnement et l'Agronomie - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Pierrick Ollivier

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

The declining price anomaly for sequential sales of identical commodities challenges auction theory which predicts constant prices within a day. Among other hypotheses explaining the phenomenon stands the dual value of goods including a risk premium in early transactions. We consider that asymmetric bidder groups (primary processors, fishmongers, supermarket buyers) and seasonal landings may also affect the daily price pattern. On the basis of stylized facts and several panel data models, this hypothesis is tested on a Redundant French fish market of homogenous goods (live Nephrops norvegicus) when the time effects (high and low seasons, weekday effect) affecting the demand and supply conditions are taken into consideration. All models support the evidence of a daily declining pattern, but not to the same extent for all days and seasons, and all categories of buyers. Our results also show an earlier and steeper decline on periods of lower supply (or higher demand), supporting the theoretical hypothesis of risk-averse behaviors of bidders, especially fishmongers with respect to primary processors and supermarkets.

Suggested Citation

  • Frédéric Salladarré & Patrice Guillotreau & Patrice Loisel & Pierrick Ollivier, 2017. "The declining price anomaly in sequential auctions of identical commodities with asymmetric bidders: empirical evidence from the Nephrops norvegicus market in France," Post-Print hal-01604394, HAL.
    • Handle: RePEc:hal:journl:hal-01604394
    DOI: 10.1111/agec.12370
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    Cited by:

    1. Sanna Laksa & Daniel Marszalec, 2020. "Morning-Fresh: Declining Prices and the Right-to-Choose in a Faroese Fish Market," CIRJE F-Series CIRJE-F-1141, CIRJE, Faculty of Economics, University of Tokyo.
    2. Ma, Gang & Zheng, Junjun & Wei, Ju & Wang, Shilei & Han, Yefan, 2021. "Robust optimization strategies for seller based on uncertainty sets in context of sequential auction," Applied Mathematics and Computation, Elsevier, vol. 390(C).
    3. Yunhan Li & J. Scott Shonkwiler, 2021. "Assessing the Role of Ordering in Sequential English Auctions – Evidence from the Online Western Video Market Auction," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 90-105, January.
    4. Paul Pezanis-Christou & Hang Wu, 2018. "A non-game-theoretic approach to bidding in first-price and all-pay auctions," School of Economics and Public Policy Working Papers 2018-12, University of Adelaide, School of Economics and Public Policy.
    5. Vishnu V. Narayan & Enguerrand Prebet & Adrian Vetta, 2019. "The Declining Price Anomaly is not Universal in Multi-Buyer Sequential Auctions (but almost is)," Papers 1905.00853, arXiv.org.
    6. François-Charles Wolff & Frédéric Salladaré & Laurent Baranger, 2024. "A classification of buyers in first-sale fish markets: Evidence from France," Post-Print hal-04586532, HAL.

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