Which is more suitable for rare flowers, first-price sealed-bid auction or second-price sealed-bid auction?

Abstract

Dutch auction is successfully adopted in common flowers quickly in Kunming China, Netherlands, and other places; they have a large number of flower productions. However there are few papers discuss about what kind of auction mechanism is more suitable for rare flowers. Second-price auction and first-price auction are seldom used in flowers auction. We wonder which auction mechanisms in flower trade could make a good supply chain performance. In our paper, we define the notion of performance of supply chain in second-price and first-price auction about rare flowers. Using interdependent model with one single supplier and two resellers in the auction, we show the payoffs of both sides in order to weigh the indicator total revenues of supply chain, which is used to measure the performance of rare flowers supply chain. We firstly consider the quantities in consumer market with Nash equilibrium, afterward two resellers take part into the auction game, and value the bid function. After finishing the analysis of all the games, in simulation, we illustrate some numerical examples in order to validate conclusion.