Proposal preview

Auctions and their historical contexts around the globe since 1700

Abstract:
Auctions have been used around the globe since time immemorial to trade a great variety of goods. They always existed alongside “regular” trade, though, and marked differences existed across time and space in the goods that were auctioned and the auction mechanisms that were applied for this. The auctions literature, however, has so far paid little attention to the historical contexts that determined these differences. The reasons for applying existing auction mechanisms to new goods, copying mechanisms from elsewhere, or even developing new ones therefore remain poorly understood. The same holds for the role governments played in this and for how open and transparent auctions subsequently were for the common public. To solve this lacuna this session takes a global, comparative approach to determine how historical contexts determined the use and performance of auctions since 1700. It brings together economic historians and economists working on a broad range of products, regions, time periods, and auction mechanisms. The scholars listed below have already committed to the session, which will be completed through a call for papers (e.g. through EH.net) when accepted.

Chair:
Anne Wegener Sleeswijk (University of Paris 1 Panthéon-Sorbonne)

Papers:
1. Lars Boerner (King’s College London), ‘Auctions – A Selective Literature Review and Research Agenda Through the Lens of History and Market Design’.
2. Anne Wegener Sleeswijk (University of Paris 1 Panthéon-Sorbonne), ‘Auctions for Wine in the United Provinces and the East Indies in the 18th Century: Merchant Practices and the Social Definition of Value’.
3. Kristina Lilja (Uppsala University) and Pernilla Jonsson (Stockholm University), ‘Auctions and Credits: Clothes and textiles as store of value and medium of exchange, Sweden 1830–1900’.
4. Christiaan van Bochove (Radboud University Nijmegen) and Lars Boerner (King’s College London), ‘Auctions and Bidding Behavior on Financial Markets in Eighteenth Century Amsterdam’.
5. Bernardo Wjuniski (London School of Economics), ‘Guiding the Invisible Hand: Auctions Design and Multiple Exchange Rates in Brazil, 1953-1961’.
6. Simon Ville (University of Wollongong), ‘The ascendancy of the centralised auction system in the international wool trade, 1850-1939’.

Organizer(s)

  • Christiaan van Bochove Radboud University Nijmegen C.vanBochove@let.ru.nl
  • Lars Boerner King's College London lars.boerner@kcl.ac.uk
  • Kristina Lilja Uppsala University kristina.lilja@ekhist.uu.se

Session members

  • Anne Wegener Sleeswijk, University of Paris 1 Panthéon-Sorbonne
  • Kristina Lilja, Uppsala University
  • Pernilla Jonsson, Stockholm University
  • Christiaan van Bochove, Radboud University Nijmegen
  • Lars Boerner, King's College London
  • Bernardo Wjuniski, London School of Economics
  • Simon Ville, University of Wollongong

Discussant(s)

  • Saumitra Jha Stanford University saumitra@stanford.edu

Papers

Panel abstract

Auctions have been used around the globe since time immemorial to trade a great variety of goods. They always existed alongside “regular” trade, though, and marked differences existed across time and space in the goods that were auctioned and the auction mechanisms that were applied for this. The auctions literature, however, has so far paid little attention to the historical contexts that determined these differences. The reasons for applying existing auction mechanisms to new goods, copying mechanisms from elsewhere, or even developing new ones therefore remain poorly understood. The same holds for the role governments played in this and for how open and transparent auctions subsequently were for the common public. This session takes a global, comparative approach to determine how historical contexts determined the use and performance of auctions since 1700. It brings together case studies on a broad range of products, regions, time periods, and auction mechanisms.

1st half

Auctions - A Selective Literature Review and Research Agenda Through the Lens of History and Market Design

Lars Boerner

The aim of this paper is two-fold. First it reviews the widely scattered contributions on the history of auctions produced over the last decades. It will do this in the light of the central research questions of this panel: Which type of auction mechanisms for what kind of products appeared and vanished in which historical context? What were the economic, political, or cultural motivations to establish auction platforms, who were the initiators, and what was the role of political institutions in this process? Secondly it will connect the research agenda of this panel with recent insights of the economic literature on auctions and market design. The goal is to identify how these insights can be helpful to better understand auctions in the historical context, but also how an economic historical analysis can contribute to recent discussions in the market design literature.

The aim of this paper is two-fold. First it reviews the widely scattered contributions on the history of auctions produced over the last decades. It will do this in the light of the central research questions of this panel: Which type of auction mechanisms for what kind of products appeared and vanished in which historical context? What were the economic, political, or cultural motivations to establish auction platforms, who were the initiators, and what was the role of political institutions in this process? Secondly it will connect the research agenda of this panel with recent insights of the economic literature on auctions and market design. The goal is to identify how these insights can be helpful to better understand auctions in the historical context, but also how an economic historical analysis can contribute to recent discussions in the market design literature.

Auctions for Wine in the United Provinces and the East Indies in the 18th Century: Merchant Practices and the Social Definition of Value

Anne Wegener Sleeswijk

Auctions have long been widely used in international wine trade. In the 18th century in the main trading centers for wine in the United Provinces, open ascending price auctions and “Anglo-Dutch” auction sales were currently organized in taverns by specialized wine brokers. The Dutch East India Company also introduced auction sales for wine overseas, organized public sales of Contantia wines at home, and acted as a buyer at brokers’ auctions. This contribution presents three case studies on merchant decision-making at the auction in a Dutch, European and intercontinental context to understand the process of the social determination of value.

Auctions have long been widely used in international wine trade. In the 18th century in the main trading centers for wine in the United Provinces, open ascending price auctions and “Anglo-Dutch” auction sales were currently organized in taverns by specialized wine brokers. The Dutch East India Company also introduced auction sales for wine overseas, organized public sales of Contantia wines at home, and acted as a buyer at brokers’ auctions. This contribution presents three case studies on merchant decision-making at the auction in a Dutch, European and intercontinental context to understand the process of the social determination of value.

Auctions and Credits: Clothes and textiles as store of value and medium of exchange, Sweden 1830–1900

Kristina Lilja and Pernilla Jonsson

This paper analyses to what extent clothes and textiles were used to capitalize assets during a period of transition to a modern market economy. Auction trade facilitated the need to realised assets and made the division of estates possible. Clothes and textiles made up a large share of the goods traded. As a result of industrialization and monetarization, second-hand prices decreased at the end of the 19th century. This meant difficulties to determine the prices of second-hand clothes and the value of them as medium of exchange. This development affected mainly individuals that could not use the ordinary credit market in periods of economic difficulties. Probate records and auction protocols show that despite monetization, money in circulation was scarce and large shares of the households’ transactions were on credit still at the turn of the 20th century.

This paper analyses to what extent clothes and textiles were used to capitalize assets during a period of transition to a modern market economy. Auction trade facilitated the need to realised assets and made the division of estates possible. Clothes and textiles made up a large share of the goods traded. As a result of industrialization and monetarization, second-hand prices decreased at the end of the 19th century. This meant difficulties to determine the prices of second-hand clothes and the value of them as medium of exchange. This development affected mainly individuals that could not use the ordinary credit market in periods of economic difficulties. Probate records and auction protocols show that despite monetization, money in circulation was scarce and large shares of the households’ transactions were on credit still at the turn of the 20th century.

2nd half

The ascendancy of the centralised auction system in the international wool trade, 1850‐1939

Simon Ville

This paper investigates the growth of the sale of wool by open cry auction from the nineteenth century. Initially, the international trade was focussed on Europe, especially London, but by about the 1890s, the point of sale had begun to transfer to the main producing nations of Australia, New Zealand, South Africa, Argentina, and Uruguay. Our main focus is on the principal international auctions held in the Australian cities – especially Sydney and Melbourne – a reflection of Australia’s position as the leading apparel raw wool producer. We explain how the auctions worked and why they were the preferred method of sale accounting for over 95% of the clip. The heterogeneous, tactile nature of wool as a commodity, together with the size of the wool clip and the sophisticated selling institutions largely explain their success. Today, open cry auction remains the main method of selling Australian wool.

This paper investigates the growth of the sale of wool by open cry auction from the nineteenth century. Initially, the international trade was focussed on Europe, especially London, but by about the 1890s, the point of sale had begun to transfer to the main producing nations of Australia, New Zealand, South Africa, Argentina, and Uruguay. Our main focus is on the principal international auctions held in the Australian cities – especially Sydney and Melbourne – a reflection of Australia’s position as the leading apparel raw wool producer. We explain how the auctions worked and why they were the preferred method of sale accounting for over 95% of the clip. The heterogeneous, tactile nature of wool as a commodity, together with the size of the wool clip and the sophisticated selling institutions largely explain their success. Today, open cry auction remains the main method of selling Australian wool.

Guiding the Invisible Hand: Auctions Design and Multiple Exchange Rates in Brazil, 1953-1961

Bernardo Wjuniski

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Auctions and Bidding Behavior on Financial Markets in Eighteenth Century Amsterdam

Christiaan van Bochove and Lars Boerner

This paper studies the use of auctions to clear financial markets in 18th century Amsterdam which was one of the leading financial markets of the time. In particular we look into the behavior of different auction participants during the auction process with regards to their winning bidding strategies. We identify different types of bidders by their name and profession and follow them over several years. We show how different types of winning bidders specialized in different types of portfolios of securities and also show how their buying behavior changed over time. We argue that different types of bidders were able to gather different kinds of information for the securities offered which influenced their bidding and buying strategies. In addition, we show that the ability to collect this information also depended on the specific historical context which changed over time. Our study is based on approximately 17000 auctions on 469 days...

This paper studies the use of auctions to clear financial markets in 18th century Amsterdam which was one of the leading financial markets of the time. In particular we look into the behavior of different auction participants during the auction process with regards to their winning bidding strategies. We identify different types of bidders by their name and profession and follow them over several years. We show how different types of winning bidders specialized in different types of portfolios of securities and also show how their buying behavior changed over time. We argue that different types of bidders were able to gather different kinds of information for the securities offered which influenced their bidding and buying strategies. In addition, we show that the ability to collect this information also depended on the specific historical context which changed over time. Our study is based on approximately 17000 auctions on 469 days over period of 17 years.