| An auction is the process of buying and | | | | real estate |
| selling things by offering them up for bid, | | | | |
| taking bids, and then selling the item to the | | | | the wine auction business, where serious |
| highest bidder. Auctioning can be traced as | | | | collectors can gain access to rare bottles |
| far back as 500 B.C. In economic theory, an | | | | and mature vintages, not typically available |
| auction is a method for determining the value | | | | through retail channels |
| of a commodity that has an undetermined or | | | | |
| variable price. Auctions can be with reserve | | | | in the sale of all types of real property |
| or minimum, or without minimums, or absolute | | | | including residential and commercial real |
| or no reserve. In reserve auctions, there is | | | | estate, farms, vacant lots and land |
| a minimum bid or reserve price; if the | | | | |
| bidding does not reach the minimum, there is | | | | for the sale of consumer second-hand goods of |
| no sale (but the person who puts the item up | | | | all kinds, particularly house clearances and |
| for auction may still owe a fee to the | | | | online auctions. |
| auctioneer or auction company). In absolute | | | | |
| or no reserve auctions, the sale is | | | | sale of industrial machinery, both surplus or |
| guaranteed, with only the price left to be | | | | through insolvency. |
| determined. In the context of auctions, a bid | | | | |
| is an offered price. | | | | in commodities auctions, like the fish |
| | | | wholesale auctions |
| History of the Auction | | | | |
| | | | in thoroughbred horseracing, where yearling |
| According to ancient Greek scribes, the more | | | | horses are commonly auctioned off; and |
| generally accepted auction occurred first in | | | | |
| Babylon in 500 B.C. During this period, | | | | in legal contexts where forced auctions |
| auctions were held annually, and women were | | | | occur, as when one's farm or house is sold at |
| sold on the condition of marriage. It was | | | | auction on the courthouse steps. |
| considered illegal to allow a daughter to be | | | | |
| sold outside the auction method. Women with | | | | Although less publicly visible, the most |
| “beauty†engendered higher | | | | economically important auctions are the |
| bidding, women without “beauty†| | | | commodities auctions in which the bidders are |
| had to pay a dowry to be accepted into the | | | | businesses even up to corporation level. |
| auction, and thus the price would be | | | | Examples of this type of auction include: |
| negative. | | | | |
| | | | sales of businesses |
| During the Roman Empire, following military | | | | |
| victory, Roman soldiers would often spear the | | | | spectrum auctions, in which companies |
| ground to mark the location of spoils in | | | | purchase licenses to use portions of the |
| which goods and property were seized. Roman | | | | electromagnetic spectrum for communications |
| business agents were said to have accompanied | | | | (for cell phone networks, for example) |
| warriors into battle to help facilitate | | | | |
| expected sales. The Romans also used the | | | | timber auctions, in which companies purchase |
| auction to liquidate their own property. For | | | | licenses to log on government land |
| example, Marcus Aurelius is said to have | | | | |
| auctioned off prized heirlooms and furniture, | | | | electricity auctions, in which large-scale |
| (an auction that, as legend has it, lasted | | | | generators and consumers of electricity bid |
| over two months). The most legendary auction | | | | on generating contracts |
| occurred in the year 193 A.D. when the entire | | | | |
| Roman Empire was put on the auction block by | | | | environmental auctions, in which companies |
| the Praetorian Guard. On March 23rd, The | | | | bid for licenses to avoid being required to |
| Praetorian Guard first killed Pertinax the | | | | decrease their environmental impact |
| emperor, and then announced that the highest | | | | |
| bidder could claim the entire Empire. Didius | | | | debt auctions, in which governments sell debt |
| Julianus outbid everyone for the price of | | | | instruments, such as bonds, to investors. The |
| 6,250 drachmas per Guard, an act that | | | | auction is usually sealed and the uniform |
| initiated a brief civil war. Didius was then | | | | price paid by the investors is typically the |
| beheaded two months later when Septimus | | | | best non-winning bid. In most cases, |
| Severus conquered Rome. | | | | investors can also place so called |
| | | | non-competitive bids, which indicates an |
| During the seventeenth century and emerging | | | | interest to purchase the debt instrument at |
| soon after the French Revolution, auctions | | | | the resulting price, whatever it may be |
| came to be held in taverns and coffeehouses | | | | |
| to sell art. Such auctions were held daily, | | | | auto auctions, in which car dealers purchase |
| and catalogs were printed to announce | | | | used vehicles to retail to the public. |
| available items. | | | | |
| | | | Major auction houses include Christie's, |
| The oldest auction house has been established | | | | Sotheby's, Lyon & Turnbull and Bonhams. |
| in 1707 in Austria. | | | | Internet auctions such as eBay and |
| | | | GoIndustry.com have become very popular. |
| During the American civil war, goods seized | | | | |
| by armies were sold at auction by the Colonel | | | | Auction catalogs are frequently printed and |
| of the division. Thus today's auctioneer | | | | distributed before auctions of rare and/or |
| carries the unofficial title of "colonel". | | | | collectible items; these catalogs may be very |
| | | | elaborate works, with considerable details |
| Auctions are publicly and privately seen in | | | | about the items being auctioned. |
| several contexts and almost anything can be | | | | |
| sold at auction. Some typical auction arenas | | | | Auctioneers are usually trained in the legal |
| include the following: | | | | and practical aspects of conducting auctions. |
| | | | Some jurisdictions require auctioneers to be |
| the antique business, where besides being an | | | | licensed and bonded. In the U.S., some |
| opportunity for trade they also serve as | | | | auctioneers who have completed auctioneer |
| social occasions and entertainment | | | | school use the title Colonel and are given |
| | | | this honorary title because in the U.S. Civil |
| in the sale of collectibles such as stamps, | | | | War, Colonels of the armies were called upon |
| coins, classic cars, fine art, and luxury | | | | to auction off the spoils of war. |