Dutch Flower Auctions Research Articles

Evaluation of the possibility of obtaining viable seeds from the cross-breeding Hippeastrum × chmielii Chm. with selected cultivars of Hippeastrum hybridum Hort.

Abstract Hippeastrum sp. is a popular cut flower and a popular potted plant, currently occupying the 11th position among cut flowers sold on the Dutch flower auctions. Hippeastrum × chmielii was bred by Henryk Chmiel at the Warsaw University of Life Sciences (WULS), Poland. The aim of this study was designed to test the ability of two clones of H. × chmielii to reproduce generatively by pollinating by three cultivars of Hippeastrum hybridum – ‘Gervase’, ‘Rio Negro’ and ‘Royal Velvet’. Pollen viability was tested by germination on the medium and by acetocarmine staining. The receptiveness of the stigmas and ovules of H. × chmielii and thus their ability to possibly accept compatible pollen were checked by staining with red alizarin. The viability of pollen grains of tested cultivars was estimated at 66.4–83.0% and their high ability to develop pollen tube was found. It was determined that the embryos of both H. × chmielii clones were fully receptive. A total of 72 crossings were performed in 6 combinations. Seeds collected about 1 month after pollination were germinated immediately after harvest either on moist tissue paper on Petri dishes or in jars with distilled water. After 28 days the percentage of germinated seeds ranged between 48.3% and 77.9%, for different crosses. In the case of seeds obtained from crossing H. × chmielii clone 18 × H. hybridum ‘Gervase’ a higher average percentage of germinated seeds was obtained in jars while no differences were noted between the germination methods in other cases.

Information Transparency in Business-to-Business Auction Markets: The Role of Winner Identity Disclosure

One of the central issues in auction design is how much information should be disclosed to bidders. In this paper, we examine bidder's identity disclosure in sequential business-to-business (B2B) auctions. Specifically, we compare two information disclosure policies, one that publicly discloses winners’ identities (the status quo) and an alternative policy that conceals winners’ identities. Using a large-scale field experiment in the Dutch flower auction market, we find that concealing winners’ identities can significantly increase the average winning price and thereby raise the seller’s revenue. We further explore the underlying mechanism that drives the observed effect. The empirical analysis of bidding behavior in these auctions suggests that bidders tend to imitate some of their competitors who have won in previous rounds of auctions and shade their bids accordingly. Concealing winners’ identities can disrupt such imitation heuristic, which in turn mitigates the price-declining trend in sequential rounds. Our findings have important implications for the design of information disclosure policies in B2B auction markets. This paper was accepted by Chris Forman, information systems.

Sequential Effects and Bidder Heterogeneity in B2B Auctions: Evidence from Truckload Spot Auctions

Heterogeneous bidding behavior by firms in business-to-business procurement auctions has recently been observed in contexts as wide-ranging as Dutch flower auctions and auctions for secondhand goods. But there has yet to be an empirical examination of what types of firms behave in which ways. We study a longitudinal dataset of spot auctions in which we observe exogenously-imposed business constraints on the bidding firms – some firms can perform work only using assets that they own and operate, while others must outsource work – i.e., brokers. These business constraints manifest themselves in strikingly different behavior by the bidding firms. Brokers bid often and with relatively high prices, while firms who operate assets bid infrequently, with low prices, and are highly affected by capacity constraints. The two types of firms have different response mechanisms in sequential auctions. Brokers adjust their prices in subsequent auctions based on whether they won or lost the previous auction, while firms who operate assets decide whether or not to place a bid. We examine other sources of heterogeneity and discuss implications for our focal industry.

If Winning isn't Everything, Why do they keep Score? A Structural Empirical Analysis of Dutch Flower Auctions

This paper provides a structural empirical analysis of Dutch auctions of houseplants at the flower auction in Aalsmeer, the Netherlands. The data set is unique for Dutch auctions in the sense that it includes observations of all losing bids in an interval adjacent to the winning bid. The size of this interval is determined by the speed of reaction of the auction participants, and as such these data are collectible due to neurological constraints on information processing. The data on losing bids are shown to be informative on the structural model determinants. The models are estimated using the Gibbs sampler with data augmentation. We take account of data limitations concerning the number of bidders. The estimation results are used to investigate whether actual reserve prices are optimal, and to determine the effects of reserve price changes.

Measuring Price–Quantity Relationships in the Dutch Flower Market

This research applies an inverse, almost ideal demand model with seasonal adjustments to estimate price–quantity relationships among major cut flower species traded at the Dutch flower auctions. Trigonometric functions are used as a flexible and efficient alternative to standard seasonal dummies. The estimated price and scale flexibilities were all found to be statistically significant with signs as expected. The demand for all flower groups is inflexible, and most of them are quantity substitutes. Based on the estimated values for price and scale flexibilities, a potential for market timing seems to exist, i.e., flower producers may use easily available calendar information to predict prices and quantities.

Modeling Influence of Product Quality and Grower Reputation on Prices in Dutch Flower Auctions

The purposes of this study are to examine differences in prices that safari sunset flower growers from Israel receive on the Dutch flower bursa, suggest factors that influence such differences, and examine strength and significance of each factor. We show that price differences between growers can reach 36-47%. In the regression model price differences are regressed on explanatory variables that include proxies for flower quality and grower reputation. The model explains 58-59% of the price variability and enables to compare elasticity of price by the studied factors. Subsequent ordered probit analysis confirmed the relevance of the chosen variables and their ability to explain also the growers clustering by received prices. Analysis of marginal effects shows that changes in the probability of belonging to a specific price group of growers are consistent with the regression model results.

Modeling Influence of Product Quality and Grower Reputation on Prices in Dutch Flower Auctions

The purposes of this study are to examine differences in prices that safari sunset flower growers from Israel receive on the Dutch flower bursa, suggest factors that influence such differences, and examine strength and significance of each factor. We show that price differences between growers can reach 36% - 47%. In the regression model price differences are regressed on explanatory variables that include proxies for flower quality and grower reputation. The model explains 58% - 59% of the price variability and enables to compare elasticity of price by the studied factors. Subsequent ordered probit analysis confirmed the relevance of the chosen variables and their ability to explain also the growers clustering by received prices. Analysis of marginal effects shows that changes in the probability of belonging to a specific price group of growers are consistent with the regression model results.

A world of flowers: Dutch flower auctions and the market for cut flowers

A world of flowers: Dutch flower auctions and the market for cut flowers

Efficiency versus Economy of Time in Multi-Unit Descending Auction: The Role of 'Mari' at Flower Markets in Japan

The auctioning rule in Japanese flower markets is a slightly modified version of that of the original Dutch flower auction. At Japanese flower markets, there is an additional stage, called “mari,” where buyers who lost in the previous auction can apply for purchasing the remainder of flowers at the same price as in the previous auction. We investigate the role of “mari” in multi-unit descending auction, and show that “mari” extensively speeds up the market procedure at the cost of sufficiently small loss of efficiency, compared to the original Dutch sequential auction.

Bargaining Power and Information Technology in African–European Business Relationships:: Case of the Dutch Flower Auctions

This article addresses the emergence of African–European business relationships. Its focus is on the role of bargaining power and information technology and its impact on the different stakeholders in (electronic) markets (sellers, market maker, buyers). Information technology is seen as an enabling technology that facilitates reaching a wider customer base (called reach) and providing a channel for increased customer services (called richness). The central question is how African suppliers can create bargaining power by means of information technology and therefore enter and improve their position in European markets. Research is carried out in the flower industry. In this industry African flower growers create competitive advantage and develop business relationships with European buyers (wholesalers, retailers). In this article we investigate three flower markets (Tele Flower Auction, FloraHolland Auction, and Aalsmeer Auction), the role of African flower growers, and the use and impact of information technology in these markets. The results of our research show that there are potentials for African flower growers to enter the European flower markets and to increase their position of bargaining power. A first potential is using and implementing information technology for the access to new and large European markets. African flower growers use information technology to streamline transaction processes and lower transaction costs. A second potential is related to the quality and specificity of the produced flower products. Information technology can remove the quality uncertainty of products and can provide rich information services to buyers. The results in the flower industry suggest that information technology provides opportunities for the African producers to expand the reach and richness of their product and service offerings, thus creating economic value.

Auctions of Homogeneous Goods with Increasing Returns: Experimental Comparison of Alternative “Dutch” Auctions

Most business-to-business (B2B) auctions are used to transact large quantities of homogeneous goods, and therefore use multiunit mechanisms. In the B2B context, bidders often have increasing returns to scale, or synergies. We compare two commonly used auction formats for selling multiple homogeneous objects, both sometimes called “Dutch” auctions, in a set of value environments that include synergies and potentially subject bidders to the “exposure” and “free-riding” problems. We find that the descending-price auction, best known for its use in the Dutch flower auctions, is robust and performs well in a variety of environments, although there are some situations in which the ascending uniform-price auction similar to the one used by eBay better avoids the free-riding problem. We discuss the factors that influence each mechanism's performance in terms of the overall efficiency, the informational requirements, the seller's revenue, and the buyer's profit.

The importance of product representation online: empirical results and implications for electronic markets

We investigate the effects of online product representation at a large Dutch flower auction that implemented screen auctioning. In screen auctioning, flowers are not physically shown to the buyers anymore; instead, an image is presented on a screen to buyers in the auction hall. This online product representation entailed a decrease in information about flower quality compared to the physical product representation. Analysis of the transaction data before and after screen auctioning revealed lower prices after the introduction of screen auctioning. We conclude that deficient product representation may be a partial explanation for reduced prices in electronic markets.

Making markets: how firms can design and profit from online auctions and exchanges

Markets are transitioning from place to space—but as the collapse of the initial B2B boom demonstrated, the journey won't be easy. Pioneering market makers from eBay and British Petroleum to the Dutch Flower Auctions and ChemConnect are leading the way to create new value through markets. Their experiences make two things increasingly clear: Success in the marketspace will require new ways of operating, and participation won't be optional. Ajit Kambil and Eric van Heck—respected authorities on electronic markets—argue that online auctions and exchanges will soon be an essential part of business practice. They explain why companies must adopt electronic markets now if they hope to compete in the future. And they prove that success lies not in achieving first-mover advantage in new markets, but in creating winning strategies to design and use markets to manage the supply chain, connect with customers, increase efficiency, and make decisions. Based on the authors' decade-long study of nearly one hundred successful and failed electronic markets in the United States, Europe, and Asia, the book reveals how market makers are rewriting the rules of commerce. They offer a strategic blueprint for designing, implementing, and profiting from electronic markets.

THE ROLE OF PRODUCT QUALITY INFORMATION, MARKET STATE INFORMATION AND TRANSACTION COSTS IN ELECTRONIC AUCTIONS.

Electronic auctions have rapidly increased in popularity, but the consequences of switching to an electronic auction are unclear. In part this is because multiple changes occur at the same time so one can only observe the combined effect of these changes and not the effect of each separate change. For instance, electronic bidders face lower transaction costs, but also have less information about product quality and about the state of the market such as the number of bidders. In this paper, we report a study of bidding behavior at a large Dutch flower auction in which we are able to separate some of these effects. We compare electronic bidders with traditional bidders and when correcting for quality differences and seasonal effects, we find that they to bid lower on average than traditional buyers, as predicted by Bakos (1991, 1997). The electronic bidders were divided in two subgroups, internal bidders and external bidders. The external bidders had less product quality information and market state informa...

DECISION TREE MODELLING TO SUPPORT INVESTMENT DECISIONS ON FLOWER PRODUCTION FOR THE NORTHERN HEMISPHERE

The aim of this research was to develop a generic decision tree model that captures and integrates in a logical and orderly manner the impacts of production and marketing activities that determine the profitability of flower production for export. The model has to indicate options necessitating choices between alternative production and marketing activities and has to show the impact of a particular choice on the profitability of the total operation. The model should be easily adaptable to evaluate the suitability of various flowers for export. The model was applied to describe the income and cost determinants and relevant choices with regard to the production of Protea Magnifica (Queen Protea) in the Western Cape to be sold on Dutch flower auctions.

Forecasting Prices at the Dutch Flower Auctions

Prices at the Dutch flower auctions are extremely volatile. Price changes of +/‐20 per cent one week to the next represents a normal event, and +/‐50 per cent is not uncommon. Since production planning in the flower business offers a complicated variation over the Newsboy Problem, good price forecasts would improve decision making on space allocation; what species to plant; the timing of harvesting, etc. This paper analyses weekly prices for three major species, i.e., roses, chrysanthemums and carnations, 1993–1996. We find that there are strong calendar regularities particularly for roses and chrysanthemums. Establishing a model in which we combine information on seasonal regularities and autoregressive price patterns, we manage to explain a substantial part of the short‐term price variability for all three species. The model is tested in an out‐of‐sample dynamic forecasting experiment during the first 35 weeks of 1997.

Reengineering the Dutch Flower Auctions: A Framework for Analyzing Exchange Organizations

This paper specifies a generalizable model of exchange processes and develops a process-stakeholder analysis framework to evaluate alternative market designs. This framework is applied to analyze a number of information technology initiatives in the Dutch flower markets. The Dutch flower auctions are the world's leading centers for trading cut flowers and potted plants. We undertake a cross-case analysis and apply our framework to analyse successes and failures in the introduction of new IT-based trading mechanisms in these markets. Based on our study, we develop a number of testable propositions on: the separation of physical and informational processes in trading, the responses of stakeholders to changes in available information due to IT initiatives, and economic and incentive conditions required for adoption of new trading processes. Finally, our detailed cases illustrate the institutional and incentive constraints, and complexities encountered in the introduction of new electronic markets.

The Emergence of Linked Fish Markets in Europe

This paper discusses the development of remote bidding electronic fish auctions. The first electronic fish auctions were introduced in Belgium and Holland and they emulated the clock auctions seen in Dutch vegetable and flower auctions. The evolution of vegetable auctions provided a model for the fish industries, with the next stage being the linkage of auctions and then remote bidding. However, the fish industry differs from the vegetable industry in having less developed systems for product description.

The impact of electronic markets: the case of the Dutch Flower Auctions

The concept of electronic markets has been widely researched. There is, however, less experience with its operation and even less with the organisational impact that electronic markets can have on specific companies and sectors. This case study discusses a very specific market which is gradually moving into the electronic age: the Dutch Flower Auction. This auction is the world marketplace for flowers and pot plants. This case is unusual both in terms of industry (agriculture) and the specific nature of the goods dealt with (highly perishable and fragile, where quality is based on perception). This study, therefore, has been particularly revealing for the use of electronic markets as a strategic response in a changing marketplace.