What are auctions

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