Re-Engineering the Dutch Flower Auctions : A Framework for Analyzing Exchange Organizations

This paper specifies a generalizable model of exchange processes and developsa process-stakeholder analysis framework to evaluate alternative marketdesigns. This framework is applied to analyze a number of informationtechnology initiatives in the Dutch flower markets. The Dutch flowerauctions are the world's leading centers for trading cut-flowers and pottedplants. We undertake a cross-case analysis and apply our framework toanalyse successes and failures in the introduction of new IT-based tradingmechanisms in these markets. Based on our study, we develop a number oftestable propositions on: the separation of physical and informationalprocesses in trading, the responses of stakeholders to changes in availableinformation due to IT initiatives, and economic and incentive conditionsrequired for adoption of new trading processes. Finally, our detailed casesillustrate the institutional and incentive constraints, and complexitiesencountered in the introduction of new electronic markets