Research On Competition And Diffusion Of Agricultural Products Trading Mode Based On Network Externality

The third plenary session of 18 put forward a modern market system, where goods and factors are free. The modern market system will speed up the perfect unified open, and establishes a fair, open and transparent market rules, which let the market play a decisive role in the allocation of resources. However, the existence of market resistance, such as information costs, transportation costs, make the market position of farmer who are small, scattered and weak very low. The current situation of agricultural production and sales is difficult to keep up with the pace of the modern agricultural development. As an important factor of agricultural products, the way to trade agricultural products affects the efficiency and cost of agricultural production and sales. In this context, changing the traditional way to trade agricultural products, and then breaking the "hard sell" dilemma of agricultural products is very necessary. Auction, as one of the modern ways to trade, in Kunming International Flower Auction Trading Center has been much successfully practiced, and it is a good chance to break the "hard sell" dilemma of agricultural products. The progress of science and technology urges Knowledge and technology spillover. It sccelerates the transmission of information, encouraging imitation and learning each other between the supply and sales business. In this case, based on the perspective of network externalities, this article studies the way of auction, introduced by a third party, how to be endogenesis and then adapt to the demand of the agricultural products trade in our country. Then this article analyses the influences coming from different types of users on the spread of different ways to trade.On one hand, based on Hotelling model, this article takes network externalities into consideration to construct the competition model between traditional way to trade and auction. Then this article researches how network externalities influence the development of auction and gain competitive advantages in our country. This study illustrates that: ①The network externalities among suppliers could improve suppliers’price, and the network externalities among sales persons are beneficial to reduce sales persons’price;②The existence of network externalities is conducive to increase revenues of suppliers and sales persons; ③Network externalities help market powers expand. On the other hand, considering customer heterogeneity, this article establishes auction way to trade diffusion model based on Bass model. Afterwards, this article simulates model and estimates parameters to analysis the effect of various types of customers on the diffusion, taking the trading volume of rose of Kunming International Flower Auction Trading Center (KIFA) as sample. Eventually, this paper predicts the trend of trading volume of each type of customers in the future. This research shows that: ① In the process of diffusion, minor customers have more effect on auction diffusion than major customers, which implies that the speed of auction diffusion is enslaved to minor customers seriously; ② Due to the reasons of auction facility, the proportion of amount major accounts taking in auction gradually expands. This trend promotes the development of agricultural cooperative organizations.This paper sets up competition and diffusion model of the trade of agricultural products, which not only enriches the academic research on auction theory model of agricultural products, but also break the "hard sell" dilemma of agricultural products. It provides a valuable reference on promoting the development of agricultural organizations and agriculture. And it is full of significance and broad application prospects.