– Janis Kondrats, CTO at Anatomy Next
In live terms, English auctions are where bids are announced by either an auctioneer or by the bidders and winners pay what they bid to receive the object. English auctions are claimed to be the most common form of third-party online auction format used and is deemed to appear the most simplistic of all the forms. The common operational method of the format is that it is an ascending-bid auction in which bids are open for all to see. The winner is the highest bidder and the price is the highest bid. The popularity of the English auction is due to the fact that it uses a mechanism that people find familiar and intuitive and therefore reduces transaction costs. It also transcends the boundaries of a traditional English auction where physical presence is required by the bidders, making it increasingly popular even though there is a susceptibility to various forms of cheating
Sealed-Bid Auction – is an auction organized for a specific group of participants. Usually, such auction type is used to sell some of the really expensive lots, for ex. an apartment or a vehicle. Auction starts only when the required number of participants have been registered. To participate, every user has to pay a particular number of bids. So, as a result, for example, you can gather 100 participants who pay 10 euros each to draw lots of iPhone. So, you get 1000 euros – and this amount already saves your budget.
A Dutch auction is a type of auction in which the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer’s price, or a predetermined reserve price (the seller’s minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a clock auction or an open-outcry descending-price auction. This type of auction is convenient when it is important to auction goods quickly since a sale never requires more than one bid. Theoretically, the bidding strategy and results of this auction are equivalent to those in a sealed first-price auction.
Bidding fee auction
A bidding fee auction is a type of all-pay auction in which all participants must pay a non-refundable fee to place each small incremental bid. The auction ends after a period of time, typically ten to twenty seconds, without new bids; the last participant to have placed a bid wins the item and also pays the final bid price, which may be significantly lower than the retail price of the item. The auctioneer makes money in two ways: the fees for each bid and the payment for the winning bid, totalling typically significantly more than the value of the item. Such auctions are typically held over the Internet, rather than in person.
‘Not worth sixpence’ auction – is a Scandinavian auction type. Its main difference is that price does not depend on biddings. Price remains stable. You can set the price to 1 cent. This auction is more exciting than simple Scandinavian because in case of win user won’t pay a big price for the lot.
The lowest unique bid auction
The lowest unique bid auction is an interesting type of auction. Its principle is that the user knows the price of the goods on the market but can buy it for “pennies.” But he will be able to buy it for pennies only if he names a minimum price during the auction. If someone else says the same minimum price, the stakes of both users burn and they need to bid again. This is the principle of the auction – if someone else says the same price – bids burn. It may look like this: 1 1.1 1.2 1.3 and so on indefinitely
Penny auction is the most interesting and venturous type of auction. It can be considered venturous due to the fact that the goods are put at a minimal cost. Thus, each participant can win goods cheaply. But since there are usually a lot of participants – in fact, everyone wants to snatch a freebie, there is a fight for each lot. The owner earns on each bet.