When Speed is of Essence: Perishable Goods Auctions

Isa Hafalir, Onur Kesten (), Katerina Sherstyuk and Cong Tao ()
Additional contact information
Onur Kesten: University of Sydney
Cong Tao: University of Technology Sydney

No 202310, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: We study a remarkable auction used in several fish markets around the world, notably in Honolulu and Sydney, whereby high-quality fish are sold fast through a hybrid auction that combines the Dutch and the English formats in one auction. Speedy sales are of essence for these perishable goods. Our theoretical model incorporating Òtime costsÓ demonstrates that such Honolulu-Sydney auction is preferred by the auctioneer over the Dutch auction when there are few bidders or when bidders have high time costs. Our laboratory experiments confirm that with a small number of bidders, Honolulu-Sydney auctions are significantly faster than Dutch auctions. Bidders overbid in Dutch, benefiting the auctioneer, but bidding approaches risk-neutral predictions as time costs increase. Bidders fare better in the Honolulu-Sydney format compared to Dutch across all treatments. We further observe bidder attempts to tacitly lower prices in Honolulu- Sydney auctions, substantiating existing concerns about pricing in some fish markets.

Keywords: auction theory; time costs; laboratory experiments (search for similar items in EconPapers)
JEL-codes: C7 C92 D02 D44 L0 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (1)

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