In my last post I described a number of the most common auction types. Below are a few less common ones, just to complete the round up!
Brazilian Auction
In a Brazilian auction, the buyer establishes the price they are willing to pay for the lot and the sellers bid on how many units they are willing to provide at that price. The auction continues until a seller makes a bid that no other seller is willing to top.
Vickrey Auction (Also known as a reverse second price sealed bid)
In a Vickrey reverse auction, a variant of a sealed bid auction, suppliers submit bids without receiving any feedback regarding their bid rankings. The award is to the successful bidder at the second lowest bid. For example, if bidder A bids £10 and bidder B bids £12, then bidder A wins the auction but receives the award at B’s bid of £12.
Dutch Auction
A method of selling in which the price is reduced until a buyer is found. The seller / auctioneer solicits bids for a Lot consisting of multiple units of the same item. Each buyer can bid on part of the Lot at a fixed price (per unit) or the whole Lot. When the auction is over, the buyer pays the highest accepted bid price.
For example, if a buyer wanted to buy 10 units, and seller A offered to provide 5 units @ £75 each, seller B offered to provide 3 units @ £80 each, seller C offered to provide 6 units @ £90 each, and seller D offered to provide all 10 units @ £95 each, then the buyer would buy 5 units from seller A, 3 units from seller B, and 2 units from seller C at a cost of £90 each for a total of £795.
Yankee Auction
Similar to the Dutch auction, the buyer solicits bids for a Lot consisting of multiple units of the same item. Each seller can bid on part of the Lot at a fixed price (per unit). When the auction is over the buyer takes the lowest priced bids, in ascending order, until a full Lot is reached.
For example, if a buyer wanted to buy 10 units, and buyer A again offered to provide 5 units @ £75, buyer B offered to provide 3 units @ £80, buyer C offered to provide 6 units @ £90, and buyer D offered to provide all 10 units @ £95, then the buyer would buy 5 units from buyer A (at £375), 3 units from buyer B (at £240), and 2 units from buyer C (at £180) for a total cost of £795.
Chinese auction
This type of auction (actually is better described as a raffle!) is typically featured at charity or other fundraising event.
In a Chinese auction, bidders do not declare values to one another or to an auctioneer…so it is questionable whether it is a auction at all. Instead, participants buy tickets at a pre determined price for each basket / lot they wish to win. The tickets / coupons purchased are essentially chances to win items. Bidders may buy as many tickets as they like, and bid them on any qualifying item(s) they want by placing them in a basket or other container in front of the item or service they are trying to win. At the conclusion of biddings, the winning ticket is drawn and the item is given to the owner of that ticket. The value of the tickets purchased is retained by the event owner.
