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

Frédéric Salladarré, Patrice Guillotreau, Patrice Loisel and Pierrick Ollivier
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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

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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.

Keywords: declining price anomaly; price control; seafood market; auction; France; Norvège; homarus; contrôle des prix (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

Published in Agricultural Economics, 2017, 48 (6), pp.731-741. ⟨10.1111/agec.12370⟩

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Journal Article: The declining price anomaly in sequential auctions of identical commodities with asymmetric bidders: empirical evidence from the Nephrops norvegicus market in France (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01604394

DOI: 10.1111/agec.12370

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