The economics of hand signals
Before dawn, while Tokyo sleeps, an intense economic ritual begins. On the green floor of the Toyosu Market, hundreds of frozen bluefin tuna are laid out in precise rows. Each fish, a potential transaction worth thousands, or even millions, of dollars, is inspected by licensed buyers. They use flashlights to check the color and texture of the meat from a small cut near the tail. At 5:30 AM, a bell rings, and the auctions start. Auctioneers begin a high-speed chant, and a flurry of hand signals—a system known as teyari—fills the air. Each flicker of a finger bids a bid, a complex language conveying prices in seconds.
This silent, rapid negotiation is a real-world example of a repeated game. The bidders, mostly intermediate wholesalers representing restaurants and retailers, interact daily. In game theory, this repetition changes behavior. Instead of engaging in aggressive bidding wars that would drive prices unpredictably high and erode profits, the bidders use the teyari system to engage in a form of tacit collusion. They signal their intentions and price levels subtly, maintaining a stable market without explicit agreements. This behavior allows them to manage competition and secure the fish they need at predictable costs, ensuring their own business stability. Each sale of a bluefin, sometimes sold in mere seconds, demonstrates this unspoken economic equilibrium.