nline Auction involves the the pre determined amount.
selling and buying of goods
by offering them up for 3. Sealed-bid first price
bids and consequently selling auction:
them to the highest bidder on the In this type of bidding, all the
internet. Origin of auctions can bidders simultaneously submit
be traced back to the 500 B.C. their bidding amount. Know bidder
knows the bidding amount of
There are various types of online his/her competitor. The one who
auctions. The following are the bids the highest amount gets the
most prominent ones: product/service.
1. Chinese Auction: 4. Sealed-bid second-price
The other name of Chinese auction auction:
is tricky tray and pick-a-price. Also known as Vickery auction. It
It is usually held at charity or is exactly similar to sealed bid
fund raising events. The bidders first price auction, except that
buy tickets and the chance of the highest bidder pays the
winning is proportional to the second highest amount and not the
number of tickets purchased. The highest bid. This is the bidding
origin of Chinese bidding is system used by eBay.
still ambiguous.
5. All-pay auction:
2. Dutch Auction: In this auction type all the
In this type of bidding, the bidders have to pay their bidding
auctioneer declares a high price amount irrespective of the fact
for the product or service and that they have won or not.
subsequently, it is lowered
depending on whether the 6. English Auction:
participants are willing to pay This is the most common auction
type round the globe. In this biggest disadvantage of the
type of auction, a reserve price English auction, which makes it a
is fixed for the goods and the little unpopular is something
customers offer larger and larger known as “winner’s curse”.
bid. Finally, the product is sold English auctions are often
to the highest bidder. English complicated and most interesting
auction is the most common because of strategies like
auction type in the US and most snipping and proxy bidding.
of the online auction sites use
the English auction type. The
About the Author:
Written by Nikola Jankovic. Find top house auctions on www.house-auction.net
Read more articles by:
Nikola Jankovic
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