The production of tea increased by 10% and the Indian economy experienced an inflation of 5.24% in 2018; the average auction price for tea had been stagnant at Rs. 140 per kg since 2013. The existing auction system was built on an archaic technology and the auction rules were constraining the system. This was triggering the buyers to move away from the auction to private sales, and thus stifling price discovery. The Tea Board of India hired consultants to redesign the auction system based on the principles of design simplicity, ease of use, and sustainability. Three areas for auction design improvement related to the type, closure, and transparency of auctions, were identified. But would they have the desired effect? The case provides an opportunity for students to discuss if the proposed interventions will work from the lens of auction as a pricing mechanism. With increase in adoption of auctions from selling search words, ad-spaces, to surplus inventory, this case should be interesting for students intending to build different pricing/business models. It is also useful for students to understand the mechanism in order to improve the existing auction systems.
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