Types Of Online Auctions

Online Auction involves the selling and buying of goods by offering them up for bids and consequently selling them to the highest bidder on the internet. Origin of auctions can be traced back to the 500 B.C.

There are various types of online auctions. The following are the most prominent ones:

1. Chinese Auction:
The other name of Chinese auction is tricky tray and pick-a-price. It is usually held at charity or fund raising events. The bidders buy tickets and the chance of winning is proportional to the number of tickets purchased. The origin of Chinese bidding is still ambiguous.

2. Dutch Auction:
In this type of bidding, the auctioneer declares a high price for the product or service and subsequently, it is lowered depending on whether the participants are willing to pay the pre determined amount.

3. Sealed-bid first price auction:
In this type of bidding, all the bidders simultaneously submit their bidding amount. Know bidder knows the bidding amount of his/her competitor. The one who bids the highest amount gets the product/service.

4. Sealed-bid second-price auction:
Also known as Vickery auction. It is exactly similar to sealed bid first price auction, except that the highest bidder pays the second highest amount and not the highest bid. This is the bidding system used by eBay.

5. All-pay auction:
In this auction type all the bidders have to pay their bidding amount irrespective of the fact that they have won or not.

6. English Auction:
This is the most common auction type round the globe. In this type of auction, a reserve price is fixed for the goods and the customers offer larger and larger bid. Finally, the product is sold to the highest bidder. English auction is the most common auction type in the US and most of the online auction sites use the English auction type. The biggest disadvantage of the English auction, which makes it a little unpopular is something known as “winner’s curse”. English auctions are often complicated and most interesting because of strategies like snipping and proxy bidding.