Abstract
This study investigates the role of bidder numbers in fish auctions, a neglected area of past research and one that is of key importance for optimal use of limited marine resources. The study of a Norwegian auction for Atlantic cod shows that prices increase when two or more bidders participate in the auction. Holding other variables such as lot size, quality grade, and seasonality constant, price increases of 4.51 %, 6.47 %, 7.18 %, and 9.88 % in auctions with two, three, four, and five plus bidders were found, compared to auctions with only one bidder. The increasing prices following from higher bidder numbers also indicate that fishers should be incentivized to provide high-quality fish at the right time of importance for optimal resource use. Increased competition also means that, over time, winning bids will be placed by the buyers that are the most capable of adding value and earning profits, which also contributes to optimal resource use. Findings also show to what extent factors such as lot size, quality grade, fishing method (bottom trawl, longline, Danish seine), and seasonality influence the probability of two or more participating bidders in auctions, which should be highly relevant information for fishers and policy makers.
Highlights
Well-functioning ex-vessel markets for fish and other seafood are important for optimal resource use for at least two reasons
Somewhat paradoxically, when fishers are free to choose between direct sales and auctions, the share of auction sales often decreases, as is the case for several European seafood auction markets (European Association of Fishing Ports and Auctions, 2005)
This is the case for the auction for frozen Atlantic cod studied here, where the share of auction sales decreased from 53 % in 2012 to below 40 % in 2018, indicating an increasing preference for direct sales
Summary
Well-functioning ex-vessel markets for fish and other seafood are important for optimal resource use for at least two reasons. Buyers may differ in their valuation of the same lots, which may depend on differences in buyers’ plans for what products to make for different customers and markets (Gobillon et al, 2017) This indicates that the characteristics of the lot and its asking price influence buyers’ propensity to participate in spe cific auctions. If fishers are successful in attracting more than one buyer to participate in the auction, it implies competition and improved chances of clearing the market at or above fishers’ price ex pectations This is indicated by a limited number of studies which find that prices increase, or decrease in the case of contract bidding, with increasing numbers of bidders (e.g., MacDonald et al, 2002; Porter and Zona, 1999). Some buyers are agents buying the fish for processors located abroad
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
