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