Research of Large Transaction Systems in the Floral Auction System within a Volume Discount Function

Abstract

The current Japanese electronic flower auction system has two big problems. One is that the present auction system can not create price stability. It is also the fate of the present system that prices are decided only by the bid(price) from buyers, a result of the law of supply and demand in very short-term viewpoint. Another problem is a measure of the so-called Waiting Mari Strategy, referring to the dominant strategy used in a field of the game theory. The Waiting Mari Strategy retards efficiency distribution in auctions. The Large Transaction System has solved these two problems, by giving priority to big buyers. The price in the present system depends only on bids(price), but the price in LTS depends on the bid and the quantity. The buyer who wants a larger quantity is regarded as a 'big buyer' and given an advantage in price. LTS aims toward the drawing of long-term stable demand of big buyers. According to the simulation in a general model that mixes big buyers and small buyers, the average price under LTS was higher than under the present system. This result is considered to be a characteristic effect of agricultural products.