ALL ABOUT AUCTIONS
Buying goods or services at an auction is a little different than going to your local general store. In fact, items are offered up for bid and people who are interested can bid on them. There are different kinds of auctions, but the most common are is the open ascending price auction. To put it plainly, those that are interested specify an amount they are willing to pay. If another person is also interested in that item, they would need to offer a higher amount. Similarly, items that are sold at auctions can vary as well. Most people associate auctions with fine art and jewelry. But, various items can be sold at auctions including vehicles, livestock, and even real estate.
Next, the dutch auction is not used by a lot of people. It’s also known as the descending price auction, and the auctioneer will start with a high asking price. Most of the time, there are multiple of the same item. The auctioneer continues to lower the price until someone agrees on the purchase price and quantity, or until the sellers lowest price is reached. If the first bidder doesn’t buy the whole lot of goods, the price will continue to drop until all the items are sold. Sometimes, it’s better to be the highest bidder because the person with the highest bid gets to pick the items out first. Some items sold at a dutch auction are perishable good such as fish or tobacco. In addition, the dutch auction is most known for dutch tulip auctions, in which case cut flowers are sold.
Lastly, the Vickrey auction is also known as the sealed bid second price auction. Interestingly, this kind of auction is almost exactly the same as a blind auction. The difference is that the winner pays the second highest bid instead of their own.