auktions

Auktions describe a method of selling goods or services through bidding, where potential buyers place successive offers and the item goes to the highest bidder when the bidding ends. They can be conducted in person, online, by telephone, or in hybrid formats, and many platforms use reserve prices to protect the seller from very low offers. The seller typically agrees on terms such as payment, delivery, and any buyer's premium.

Key participants include the seller, an auctioneer or platform operator, and bidders. The auctioneer coordinates bidding rounds, announces price increments, and declares the final hammer price. Bidders compete to reach the highest offered price before the bidding closes; the winning bid is binding in most cases.

Common formats include English auctions (ascending prices, highest bidder wins), Dutch auctions (descending price with the first acceptable bid taking the item), sealed-bid auctions (bids submitted confidentially), and online auctions combining elements of these formats. Sealed-bid auctions may result in different price discovery dynamics than open formats.

Process steps typically involve listing or cataloging the item, inspection or description, registration of bidders, bidding rounds, settlement and payment, and transfer of ownership or delivery. Economics scholars view auctions as a mechanism for price discovery and efficient allocation, though results depend on information availability, bidder incentives, and platform rules.

History notes that auctions have ancient roots and evolved into modern practices with specialized houses and online platforms. Notable traditional houses include Christie's and Sotheby's; large online marketplaces also host a range of auction formats.