I visited old friends in Hamburg over the weekend. On Sunday morning we went down to the Fischmarkt, the traditional old fish market in the harbor. Hamburg has a long history of prosperity from the fishing industry and from shipping; it was notably one of the cities with merchant associations most prosperously involved in the Hanseatic League; as the article notes, Hamburg also derived much prosperity from the salt trade:
When a canal was built from near Hamburg to Lubeck the salt trade shifted from the road to the cheaper canal route, and the Hamburg merchants who controlled the canal replaced the Kiel merchants in their position of importance in the salt trade.
The Fischmarkt retains some of the touches of this history of trade, including a fascinating and unusual auction institution that has now become a downright tourist attraction. Here is a picture of a gentleman selling plants at the Fischmarkt:
Notice that he is putting a palm tree in a box. This is how the auction works: the vendor yells out a price, say 20 Euros, and says that the first person to claim the box will get everything that is in the box. So he starts by putting this spindly palm in. But if you are a potential buyer in the crowd, what’s your incentive? You have an incentive to be quiet, to hold out until he has either put more plants in the box or put a more valuable plant in the box instead. But if you follow that strategy you run the risk of someone claiming the box before you do; this risk increases with the size of the group at the vendor’s stall. Thus it’s in the interest of the vendor to be loud and advertise the value of what he’s auctioning, even going so far as to downtalk the merchandise of his neighboring stalls. The buyers enter into the live theater of the experience by calling out that the merchandise is crap, it’s not worth 20 Euros, get it out of there and put something better in, etc.
Theoretically, this tradition strikes me as a very interesting variation on a Dutch auction, in which the seller lowers the price until a buyer accepts it. In this case, the seller maintains a fixed price, but adds more valuable items to the bundle being purchased at that price.
One of the other stalls was selling smoked eel and other preserved fish, starting from a sheath of wrapping newsprint instead of a box. Same instituion.
I am also deeply intrigued at the fact that this is a tourist attraction for more than just auction theory economist geeks. It’s gotta be the interactive live theater quality of the experience. I had a ball. Didn’t buy any fish or plants, though, much to the relief of my hosts.