Auction Advantages And Disadvantages
INTRODUCTION AUCTIONS An auction is, in its essence, a process to determine the value of a good or a specific combination of goods having an uncertain or variable price. In one form or the other, auctions have been a part of human society since very long. The earliest auctions can be traced back to Babylon in 500 B.C. Ronald Coase (1959), the British economist who won the Alfred P. Nobel Memorial prize in Economics in 1991, was among the first persons to advocate the auctioning of scarce public resource (such as radio spectrum) so that they could be allocated efficiently. Auctions have seen a phenomenon growth in the recent era and account for huge volume of economic transactions. From auction of T Bills to award of mining exploration rights, from distribution of frequency spectrum to sale of second hand goods on the internet, auctions have increasingly become an important method of conducting an economic transaction. …show more content…
They can roughly be put in the following five types: 1. Open ascending bid auction (English auction): This is the most common type of open auction usually seen at auction houses. All participants in the auction bid openly against each other with every subsequent bid higher by at least the minimum amount specified. This auction closes when exactly one bidder remains. This bidder wins the auction if her bid is at least as high as the reserve price set by the
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