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Which type of auction are called as the descending bids?

Which type of auction are called as the descending bids?

Dutch auction
A Dutch auction has also been called a clock auction or open-outcry descending-price auction. This type of auction shows the advantage of speed since a sale never requires more than one bid. It is strategically similar to a first-price sealed-bid auction.

What is descending clock auction?

A private-value auction where the auction price ticks down. The auction ends when a bidder first claims the good and pays the current price. You can also show that the optimal bidding strategy in the descending clock auction is equivalent to that of the (private-value) first-price sealed bid auction. …

What kind of auction will the bid price drops over time?

Dutch Auction
At a Dutch Auction, prices start high and are dropped successively until a bidder accepts the going price. Once a price is accepted, the auction ends. For example, the auctioneer starts at $2,000 for an object. The bidders watch the price decline until it reaches a price that one of the bidders accepts.

What is an ascending price auction?

In an ascending auction, price and allocation are determined in an open competition among the bidders. The bidders willing to pay the most win and pay prices that no other bidders are willing to top. Ascending auctions provide a process of price discovery.

Which is the best example of ascending auction?

English auctions are the most well-known kind of ascending auction. This describes auctions where the price is progressively lowered until a bidder accepts the current price. Dutch auctions are the most well-known kind of descending auction. Try our auction platform for 14-Days FREE!

How does an open descending price auction work?

This is an open descending price auction where the auctioneer starts with a high asking price and lowers the bid until one of the bidders is willing to accept the auctioneer’s price, or when the seller’s reserve price is achieved.

How does second price sealed bid auction work?

The second-price sealed-bid auction is similar to the first-price sealed-bid, except the highest bidder gets the item at the price of the second-highest bidder. For example, if the highest bidder won an auction with a bid of $500, and the previous high bid was $480, then the winning bidder only has to pay $480 for the item being sold.

What happens when the highest bidder wins an auction?

The highest bidder wins the item, but at the price offered by the second-highest bidder (or, in a multiple-item case, the highest unsuccessful bid). This type of auction is rarely used aside from setting the foreign exchange rates in some African countries.