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

Author

Listed:
  • Ajit Kambil

    (Information Systems Department, Stern School of Business, New York University, 44 West 4th Street, New York, New York 10012)

  • Eric van Heck

    (Department of Decision and Information Sciences, Rotterdam School of Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands)

Abstract

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.

Suggested Citation

  • Ajit Kambil & Eric van Heck, 1998. "Reengineering the Dutch Flower Auctions: A Framework for Analyzing Exchange Organizations," Information Systems Research, INFORMS, vol. 9(1), pages 1-19, March.
    • Handle: RePEc:inm:orisre:v:9:y:1998:i:1:p:1-19
    DOI: 10.1287/isre.9.1.1
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    References listed on IDEAS

    as
    1. Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 141-162, April.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. van Heck, H.W.G.M. & Ribbers, P.M.A., 1996. "Economic Effects of Electronic Markets," Other publications TiSEM 0bbebdc7-3d75-4c10-977c-f, Tilburg University, School of Economics and Management.
    4. van Heck, H.W.G.M. & Ribbers, P.M.A., 1996. "Economic Effects of Electronic Markets," Discussion Paper 1996-69, Tilburg University, Center for Economic Research.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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