Commodities failing in auctions: The story of unsold cod in Norway

Summary

This study addresses how commodities that go unsold at auction perform when they are subsequently sold directly or at auction. Given that the share of unsold commodities is up to 50% in some markets, this is an important yet neglected topic. With a unique dataset including approximately 40,000 frozen Atlantic cod transactions, with detailed information about each lot, including if it was previously withdrawn from the auction, we apply hedonic price modeling to investigate how these lots are priced. The results indicate that when previously withdrawn lots are sold directly, they achieve lower prices than comparable lots. In the auction market, on the other hand, previously unsold lots achieve slightly higher prices than comparable lots.