| You've read about them, you've heard about them, | | | | four major one-sided auction formats: English, Dutch, |
| you've probably participated in one. But what exactly | | | | First-Price sealed-bid, and Vickrey (uniform |
| are auctions? Isn't it just the simple method of selling | | | | second-price). |
| an object to interested people who bid until the | | | | You may ask which type of auction is the best. It |
| highest bidder gets it? | | | | actually depends on the perspective of both the |
| That is definitely the scenario in most auctions. But | | | | seller and the buyer. Some auction types lessen room |
| auctions are actually more complex than people | | | | for cheating while others seem to actually encourage |
| realize. Do you know that not all auctions have | | | | such. Some auctions require the presence of the |
| ascending price schemes? While the ascending bid is | | | | buyer while some do not. Before an auction is set, |
| the most popular auction format, other formats exist | | | | the seller must first analyze the auction format that |
| such as the descending, simultaneous and handshake | | | | would best benefit him. An aspect of auctioning that |
| forms of bidding. | | | | is sometimes very vital is speed. If the item you are |
| An auction, in general terms, is the method of | | | | selling perishes quickly, like flowers or fish, of course |
| allocating scarce goods. It is a unique selling method | | | | a quick auction is required. |
| that is based on competition. Truly, the objectives | | | | While it has its' advantages, an auction also has |
| are simple: the seller wants to obtain the most | | | | drawbacks, like the so-called "winner's curse". This is |
| money for his item while the buyers want to | | | | the phenomenon when a "lucky" winner pays more |
| purchase it at their own desired prices. Everything | | | | for an item than it is worth. These winners realize |
| can be sold in auctions - from singular items like | | | | that their valuation of an object is higher than that of |
| paintings to multiple units of a homogenous item such | | | | anyone else. |
| as treasury securities. Auctions are most useful when | | | | In this age of modern technology, auctions have |
| a seller is unsure of the price his item can get, or | | | | found a place where it can thrive and reach more |
| when selling a commodity with undeterminable quality. | | | | prospective buyers: the Internet. Online auctions are |
| Some unique things about auctions: the price of an | | | | becoming more popular each day as buyers can |
| item is set by the bidders and not by the seller. Also, | | | | browse through the products and bid at their own |
| the auctioneer doesn't own the goods but rather | | | | time and pace. Furthermore, the range of products |
| acts as an agent for the real owner. Lastly, buyers | | | | people auction online is endless and intriguing - you |
| often know the value of an item more than the | | | | could spend hours just browsing. |
| seller. | | | | All in all, auctions are a pure marketplace at work in |
| Various classifications of auctions exist. There are | | | | its finest form. So if you're planning to sell something, |
| open auctions and sealed-bid auctions. There are | | | | you might consider auctioning it. Just look at it from |
| auctions wherein the price simple ascends and there | | | | this perspective: your clutter is other people's |
| are auctions where the price drops at regular | | | | treasure. And they're going to compete to get it. |
| intervals. Experts agree, however, that there are | | | | |