| e Auction involves the selling and buying of goods by | | | | 4. Sealed-bid second-price auction: |
| offering them up for bids and consequently selling them | | | | Also known as Vickery auction. It is exactly similar to |
| to the highest bidder on the internet. Origin of auctions | | | | sealed bid first price auction, except that the highest |
| 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 have |
| pick-a-price. It is usually held at charity or fund raising | | | | 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 globe. |
| purchased. The origin of Chinese bidding is still | | | | In this type of auction, a reserve price is fixed for the |
| ambiguous. | | | | goods and the customers offer larger and larger bid. |
| 2. Dutch Auction: | | | | Finally, the product is sold to the highest bidder. English |
| In this type of bidding, the auctioneer declares a high | | | | auction is the most common auction type in the US |
| price for the product or service and subsequently, it is | | | | and most of the online auction sites use the English |
| lowered depending on whether the participants are | | | | auction type. The biggest disadvantage of the English |
| willing to pay the pre determined amount. | | | | auction, which makes it a little unpopular is something |
| 3. Sealed-bid first price auction: | | | | known as “winner’s curse”. |
| In this type of bidding, all the bidders simultaneously | | | | English auctions are often complicated and most |
| submit their bidding amount. Know bidder knows the | | | | interesting because of strategies like snipping and |
| bidding amount of his/her competitor. The one who | | | | proxy bidding. |
| bids the highest amount gets the product/service. | | | | |