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

In 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.

Research Highlights
► We analyze the three simultaneous Dutch auctions wholesale fish market of Ancona.
► We characterize the behavior of buyers and sellers in such a market structure.
► We find that buyers loyalty to sellers is still present under the auction mechanism.
► We explain the “declining price paradox” by modeling the buyers bidding strategy.