Price formation of fish in landing markets: An analysis of Japanese spiny lobster in Mie prefecture

Abstract

In Japanese landing markets, fish prices are usually determined in auctions. Previous theoretical research argued that under certain conditions, the price was the same regardless of the style of auction. However, no empirical studies have been conducted in Japan to verify this theoretical assertion. In Japanese local landing markets, fish prices may be influenced by auction style or other parameters such as the number of auction participants. To reveal the factors contributing to fish prices at local landing markets, actual transaction data of Japanese spiny lobster in landing markets in Mie prefecture were analyzed. The price was significantly influenced by the auction style. In particular, (1) the price is higher when the prices bid by other bidders are open to all auction participants, (2) the price is higher when a larger number of buyers participate in the auction, (3) the price is higher when the trading time per auction is longer, and (4) the price is higher when Japanese spiny lobster is traded collectively, by a single large unit per auction per day.