William Vickrey, highly regarded as the founder of auction theory, was Professor of Economics at Columbia University, where he published two papers in which his views on auctions:
"Counterspeculation, auctions and competitive sealed tenders, 1961, Journal of finance
«Games» auctions and tenders, 1962, recent advances in game theory
In 1996 he received the Nobel Prize "for his fundamental contributions to the economic theory of incentives under asymmetric information." It is important to understand that asymmetric information is an important component of auctions, where potential buyers have different levels of knowledge about the value of the item.
Although Vickrey auction's work as "one of my overzealous abstract economy is at best marginal value in terms of human well-being, for those of us who work with online auctions, most of what he described is helpful for understanding our market.
VICKREY auctions are 4 common types:
English
Dutch
First price sealed bid
Second-price sealed bid
English auction
The most common type of auction is an English auction, although it can be also known as ascending price auction. In ascending price auction each subsequent bid higher than the previous one. This is the most popular type of auction for individual items.
Although traditional ascending price auction format is "soft-close" where bidding continues until the final proposal placed most of today's online auctions as "hard close"-also known as "interval time" auction, time-bound, regardless of the current tender. It is important to note that a "soft close», a pair of scissors that trades over the last few seconds or minutes to the item repaired once the auction is still open as long as there are applications.
In an effort to minimize the shear rate and provide more of a "soft close" their "hard close" auctions eBay allows bidding for use "proxy bidding". The proxy bidding auctions is the highest price they are willing to pay for an item when they first bid. The application starts at the lowest possible level and increases automatically only beaten their original low price. For more information on the proxy bid feature "on eBay here.
http://pages.eBay.com/help/Buy/proxy-Bidding.HTML
Amazon.com currently offers an opportunity for their auctions, entitled "Going, Going, Gone". Going, going, Gone "function extends the auction for 10 minutes, if the rate effectively creating" soft close. For more information about "Going, Going, Gone" feature on Amazon go here. http://www.Amazon.com/exec/obidos/TG/Browse/-/1161360/103-1666189-8415007# Going-Gone
In terms of customers ' hard close "is preferable because they may be able to make a definitive proposal before others can react, maybe win the auction at a lower cost.
For sellers "soft close» format provides an opportunity to realize the maximum price for a time by removing restrictions on auction. As long as bidders of auction is still open.
Dutch auction
As you may have guessed, the concept of a Dutch auction has its origins in the Netherlands. Unlike English auctions using methods of increasing prices Dutch auction descending price auction and are often used when multiple auction the same elements. The Dutch auction bidding begins with a relatively high price that gradually down is determined by the application.
Dutch auction as an example let us say you have 10 items you wish to sell for $ 20 each.
Partner_A bets $ 18 for 6 elements
Participant b bets $ 17 for 5 elements
The final result is:
A participant will receive $ 6 to 17
Party b will receive $ 4 paras 17
Please note that most Dutch auctions allow parties to renounce the order on fewer items than what they are betting on. "Soft" or "hard close" format can be used with Dutch auctions, though the most common "it is difficult to close.
First price sealed bid auctions
Sealed bid auctions are different from English and Dutch in both applications are not announced to the other bidders. Individual rate is only know for attendee and vendor. This type of auction can be either a buyer bid, where the highest bidder wins the item and pays in the amount of their bid, bid, or where the seller sells the item cheaper price and is paid the amount bid. This type of auction is common to construction contracting, military procurement, foreign exchanges and other types of cargo.
Second price auctions closed trades
Another common name for the second price sealed bid auctions, Vickrey auctions (named after William Vickrey) there are small differences at the first price auction for Vickery auction. The buyer bid in the auction the highest bidder buys an item and pays the second highest bid amount. Or the seller bidding auction, low price and is paid the amount the item sells the second lowest price.
Above descriptions provide a general overview of the most popular auction types in use today. Depending on the auction site, these general categories can include a number of options and parameters such as reserve prices, public or private places, multiple elements, items, fixed price lists and many to mention a few. Before the start of any particular type of auctions make sure you explore and understand the rules for the particular type of auction, as the rules may vary from website to website.
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