Types of Auction


All-pay auction
This is an auction in which all bidders must pay their bids regardless of whether they win. The highest bidder wins the item. All-pay auctions are primarily of academic interest.
Auction by the candle
A type of auction used in England for selling ships in which the highest bid laid on the table by the time a burning candle goes out wins.
Bidding fee auction
Also known as a penny auction – often requires that each participant must pay a fixed price to place each bid typically one penny (hence the name) higher than the current bid. When an auction's time expires the highest bidder wins the item and must pay a final bid price.
Buyout auction
This is an auction with an additional set price (the 'buyout' price) that any bidder can accept at any time during the auction thereby immediately ending the auction and winning the item. If no bidder chooses to utilize the buyout option before the end of bidding the highest bidder wins and pays their bid.
Combinatorial auction
This is any auction for the simultaneous sale of more than one item where bidders can place bids on an "all-or-nothing" basis on "packages" rather than just individual items. That is a bidder can specify that he or she will pay for items A and B but only if he or she gets both.
Dutch Auction
In a traditional Dutch auction the auctioneer begins with a high asking price and then lowers it until someone accepts the auctioneer’s price. The winning participant pays the last announced prices.
Holland is famous for its tulip auctions which follow this format. Dutch auctions are also sometimes used for perishable commodities such as fish and tobacco.
English Auction
This the most common form of auction in use today. Participants bid openly against each other by calling out their bid amounts or submitting the bids electronically. The auction ends when no one is willing to bid higher at which point the highest pays their bid amount and gets the item. A distinguishing feature of an English auction is that all bidders know other bidders’ bid amounts. English auctions are often used for selling antiques – artwork – collectables and real estate. There must be at least two bidders at an English auction.
Hybrid Auctions
Hybrid Auctions simply include elements of various programs listed providing the seller with the optimum approach to create additional bids for their property.
Japanese auction
This is a variation of the English auction. When the bidding starts no new bidders can join and each bidder must continue to bid each round or drop out. It has similarities to the ante in Poker.
Mystery auction
This is a type of auction where bidders bid for boxes or envelopes containing unspecified or underspecified items usually on the hope that the items will be humorous interesting or valuable.
In the early days of eBay's popularity sellers began promoting boxes or packages of random and usually low-value items not worth selling by themselves.
Multiunit auctions
These sell more than one identical item at the same time rather than having separate auctions for each. This type can be further classified as either a uniform price auction or a discriminatory price auction. Often described as Bulk Buying.
No-reserve auction (NR)
(also known as an absolute auction) is an auction in which the item for sale will be sold regardless of price. From the seller's perspective advertising an auction as having no reserve price can be desirable because it potentially attracts a greater number of bidders due to the possibility of a bargain. If more bidders attend the auction a higher price might ultimately be achieved because of heightened competition from bidders. This contrasts with a reserve auction where the item for sale may not be sold if the final bid is not high enough to satisfy the seller.
Online Auctions
Online auctions are simply another approach to an open outcry auction. An online bidding platform can be much like Ebay or it can be in conjunction with an open outcry auction.
Open Outcry Auctions
Used where the buyers prefer to bid in person and will buy the property exactly under the terms of the offering. This strategy is selected when price is the sole consideration as to who buys the property. This exciting method much resembles a fine art or other collectable auction that you may have experienced in person or on television.
Reserve auction
This is an auction where the item for sale may not be sold if the final bid is not high enough to satisfy the seller; that is the seller reserves the right to accept or reject the highest bid.
Reverse auction
A type of auction in which the roles of the buyer and the seller are reversed with the primary objective to drive purchase prices downward. While ordinary auctions provide suppliers the opportunity to find the best price among interested buyers reverse auctions give buyers a chance to find the lowest-price supplier. During a reverse auction suppliers may submit multiple offers – usually as a response to competing suppliers’ offers bidding down the price of a good or service to the lowest price they are willing to receive. By revealing the competing bids in real time to every participating supplier reverse auctions promote “information transparency”. This coupled with the dynamic bidding process improves the chances of reaching the fair market value of the item. The reverse auction is widely used by corporations – state and local Governments and other organisations. The uses are vast and include services as well as goods.
Sealed first-price auction
In this type of auction all bidders submit sealed bids and the highest named price wins. Each bidder submits only one bid. Sealed first-price auctions are used in tendering for contracts or mining leases.
Senior auction
A variation on the all-pay auction and has a defined loser in addition to the winner. The top two bidders must pay their full final bid amounts and only the highest wins the auction. The intent is to make the high bidders bid above their upper limits. In the final rounds of bidding when the current losing party has hit their maximum bid they are encouraged to bid over their maximum (seen as a small loss) to avoid losing their maximum bid with no return (a very large loss).
Silent Auction
is a variant of the English auction in which bids are written on a sheet of paper. At the predetermined end of the auction the highest listed bidder wins the item. This auction is often used in charity events with many items auctioned simultaneously and "closed" at a common finish time. The auction is "silent" in that there is no auctioneer selling individual items the bidders writing their bids on a bidding sheet often left on a table near the item.
Simulcast Auctions
An open outcry auction that is conducted in two or more bidding locations simultaneously allowing bidders in different cities or different countries to bid for the same property.
Suggested Opening Bid
An auctioneer usually has a rough idea of what an object will fetch and may start the auction action by announcing a suggested opening bid (SOB) that is low enough to be immediately accepted by one of the bidders. Once there is an opening bid other bids will be submitted. Paradoxically it has been found that the lower the SOB the higher the final winning bid will be.
Top-up auction
A variation on the all-pay auction primarily used for charity events. Losing bidders must pay the difference between their bid and the next lowest bid. The winning bidder pays the amount bid for the item without top-up.
Walrasian auction
(or Walrasian tâtonnement) is an auction in which the auctioneer takes bids from both buyers and sellers in a market of multiple goods. The auctioneer progressively either raises or drops the current proposed price depending on the bids of both buyers and sellers the auction concluding when supply and demand exactly balance.
Vickrey Auction
The procedure is similar to the sealed first-price auction but the winning bidder pays the second highest bid price rather than their own. This is similar to the proxy bidding system on eBay. Vickrey auctions are quite rare.
Vickrey Auction
The procedure is similar to the sealed first-price auction but the winning bidder pays the second highest bid price rather than their own. This is similar to the proxy bidding system on eBay. Vickrey auctions are quite rare.

 

Almost anything can be sold at auction. Some typical auction arenas include antique auctions, collectables (stamps, coins, fine art, etc.), wine auctions (rare wines and special vintages), real estate (farms, lots, land), equipment and machinery, commodities, livestock, wool, timber, generating rights, debt auctions and auto auctions.

In environmental auctions, companies bid for licenses or credits to avoid being required to decrease their carbon emissions or otherwise decrease their environmental impact.

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