Auction

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Auction is the process of purchasing and selling goods or services by offering them to bid, take bids, and then sell items to the highest bidder. The ascending open price auction is arguably the most common form of auction currently in use. Participants bid openly against each other, with each subsequent bid must be higher than the previous bid. An auctioneer can announce a price, bidders may call their own bids (or have a proxy call out of bids on their behalf), or bids may be electronically delivered with the highest bid currently displayed publicly. In the Dutch auction, the auctioneer begins with a high asking price for a number of items such as; the price is lowered until a participant is willing to accept the auction price for a number of items in the parking lot or until the seller's reserve price is met. Although the auction is most closely related in the public imagination with the sale of antiques, paintings, rare collectibles and expensive wines, auctions are also used for commodities, livestock, radio spectrum, and used cars. In economic theory, the auction may refer to a mechanism or set of trade rules for exchange.

Video Auction

Histori

The word "auction" comes from the Latin auge? , which means "I increase" or "I add". For much of history, auctions are a relatively uncommon way to negotiate the exchange of goods and commodities. In practice, bargains and sales for a certain price are generally more common. Indeed, before the seventeenth century, some of the auctions held were sporadic.

Nevertheless, the auction has a long history, which has been recorded as early as 500 BC. According to Herodotus, at Babylon the women's auction for weddings is held every year. The auction begins with the auctioneer woman deemed the most beautiful and progresses to the least. It is considered illegal to allow a girl to be sold outside of the auction method.

During the Roman Empire, after a military victory, Roman soldiers often pushed spears onto the ground where remnants of war were abandoned, to be auctioned off. Then the slaves, often caught as "spoils of war", are auctioned off in the forum under the spear, with the proceeds going to the war effort.

The Romans also used an auction to liquidate debtor assets whose properties had been confiscated. For example, Marcus Aurelius sells household furniture to pay off debts, the sale goes on for months. One of the most significant historical auctions occurred in 193 A. when the entire Roman Empire was placed in the auction block by the Praetorian Guard. On March 28, 193, the first Praetorian Guard killed the emperor of Pertinax, then offered the empire to the highest bidder. Didius Julianus defeated others at a price of 6,250 drachmas per guard, an act that started a brief civil war. Didier was then beheaded two months later when Septuius Severus conquered Rome.

From the end of the Roman Empire to the eighteenth century auction lost support in Europe, while they were never widespread in Asia.

Modern revival

In some parts of the UK during the seventeenth and eighteenth century auctions by candles began to be used for the sale of goods and infrastructure. In a candle auction, the end of the auction is marked by the end of a candle flame, which is meant to ensure that no one knows when exactly the auction will end and make the last second bid. Sometimes, other unpredictable processes, such as footprints, are used instead of expired candles. This type of auction was first mentioned in 1641 in the House of Lords record. The practice quickly became popular, and in 1660 Samuel Pepys's diary recorded two occasions when Admiralty sold a surplus ship "with an inch of candle". Pepys also recounted the hints of a very successful bidder, who had observed that, just before the end, the wax axis always lights up: when he sees this he will shout his last offer - and win. The London Gazette began reporting on art auction at a coffee shop and bar in London at the end of the 17th century.

The first known auction house in the world is Stockholm Auction House, Sweden ( Stockholms Auktionsverk ), founded by Baron Claes RÃÆ' Â¥ lamb in 1674. Sotheby's, currently the second largest auction house in the world, was established in London on March 11, 1744, when Samuel Baker led the exile of "a few hundred rare and valuable books" from the library of an acquaintance. Christie's, now the largest auction house in the world, was founded by James Christie in 1766 in London and published its first auction catalog in 1766, although a newspaper ad about Christie's sale from 1759 has been found.

Other early auction houses still in operation include Dorotheum (1707), Mallams (1788), Bonhams (1793), Phillips de Pury & amp; Company (1796), Freeman (1805) and Lyon & amp; Turnbull (1826).

At the end of the 18th century, artwork auctions are usually held in taverns and coffee shops. This auction is held every day, and the auction catalog is printed to announce the items available. In some cases, this catalog is a complex piece of art, containing considerable detail about items being auctioned. At this time, Christie established a reputation as a leading auction house, taking advantage of London's status as a major center of international art trade after the French Revolution.

As long as American civil war goods seized by soldiers are sold at auction by the Colonel's division. Thus, some of today's auctioneers in the US carry the unofficial "colonel" title.

The development of the internet, however, has led to a significant increase in auction usage because the auctioneers can request bids via the internet from various buyers in a much wider variety of commodities than was previously practical.

In 2008, the National Auction Association reported that gross revenues from the auction industry for that year were approximately $ 268.4 billion, with the fastest growing sectors being agriculture, machinery, and auction equipment and residential real estate auctions.

Maps Auction

Type

Primary

Traditionally there are four types of auctions used for the allocation of one good:

• The English auction , also known as the open price auction . This type of auction is arguably the most common form of auction in use today. Participants bid openly against each other, with each subsequent bid must be higher than the previous bid. An auctioneer may announce a price, bidders may call their own bids (or have a proxy calling a bid on their behalf), or bids may be electronically delivered with the highest bid currently displayed publicly. In some cases, the maximum bid may be left from the auctioneer, who can bid on the bidder's name in accordance with the bidder's instructions. The auction ends when no participant is willing to bid further, at which point the highest bidder pays his bid. Or, if the seller has set a minimum pre-sale price ('reserve' price) and the final bid does not reach that price, the item remains unsold. Sometimes the auctioneer sets the minimum amount by which the next bid should exceed the current highest bid. The most significant differentiating factor of this type of auction is that the current highest bid is always available for potential bidders. English auctions are generally used to sell goods, the most prominent antiques and artwork, but also used goods and real estate.
• The Dutch auction is also known as the open price auction . In traditional Dutch auctions, the auctioneer begins with the high price demanded for a number of items such as; the price is lowered until a participant is willing to accept the auction price for a number of items in the parking lot or until the seller's reserve price is met. If the first bidder does not buy all the lots, the auctioneer keeps lowering the price until all items have been offered or the reserve price is reached. Items are allocated based on an offer order; the highest bidder selects the item (s) first followed by the second highest bidder, etc. In modification, all winning participants pay only the price of the last announcement for the item they are bidding on. The Dutch auction was named for the best example, Dutch tulip auction. ("Dutch auction" is also sometimes used to describe online auctions where multiple identical items are sold simultaneously to the same amount of high bidders.) In addition to cutting flower sales in the Netherlands, the Dutch auction has also been used for perishable commodities such as fish and tobacco. Dutch auctions are not widely used, except in market orders in exchanges or currency exchanges, which are functionally identical.
• Sealed first price auction or blind auction , also known as closed first bid auction (FPSB). In this type of auction all bidders simultaneously bid sealed so no bidders know the offer from other participants. The highest bidder pays the price they send. This type of auction is different from the English auction, where bidders can only submit one offer each. Furthermore, since bidders can not see bids from other participants, they can not adjust their own bids. From a theoretical perspective, such a bidding process has been debated to be strategically equivalent to the Dutch auction. However, empirical evidence from laboratory experiments has shown that Dutch auctions with high clock speeds result in lower prices than FPSB auctions. What effectively sealed the first price auction called bidding for procurement by companies and organizations, especially for government contracts and auctions for mining leases.
• Vickrey Auctions , also known as sealed-off second price auctions . This is identical to the first sealed price auction except that the auction winner pays the second highest bid rather than his own. Vickrey auctions are critical in auction theory, and are commonly used in automated contexts such as real-time bidding for online advertising, but rarely in a non-automated context.

Secondary

The auction range is very wide and can be purchased almost anything, from home to endowment policy and everything in between. Some recent developments are the use of the Internet both as a means of disseminating information about various auctions and as a vehicle for the auction hosting itself.

Here's a quick description of the most common types of auctions.

• Government, bankruptcy, and public auction are among the most common auctions that can be found today. Government auctions are only auctions held on behalf of government agencies in general on general sales. Here one can find a wide range of materials that should be sold by various government agencies, for example: HM Customs & amp; Excise, Official Receiver, Department of Defense, local councils and authorities, liquidators, and materials prepared for auction by companies and community members. Also in this group you will find an auction ordered by an implementer who enters an individual asset who may have died in the test (those who have died without leaving a will), or in debt. One of the most interesting bodies to watch out for in auction is HM Customs & amp; Excise that may enter the auction of various goods seized from smugglers, fraudsters and blackmailers.
• Automobile and car auctions - Here one can buy anything from an accident-damaged car to a new top-of-the-range model; from a run-of-the-mill family sedan to rare collector items.
• Police auctions are generally held at public auctions even though some troops use online sites including eBay to dispose of lost items and be found and confiscated.
• Land and property auctions - Here one can buy anything from an ancient castle to a new commercial venue.
• Antiquities auctions and collectibles have an opportunity to view a large number of items.
• Internet auctions - With millions of potential viewers, the internet is the most exciting part of today's auction world. Led by sites in the United States but followed by UK auction houses, special Internet auctions sprang up everywhere, selling everything from antiques and collectibles to holidays, air travel, new computers, and home appliances.
• Title - Someone can purchase a manorial title in the auction. Every year several specialist auctions take place. However, it is important to note that the title of the manor is not the same as the title of nobility, and has been described as "meaningless" in the modern world.
• Insurance policy - Auctions are held for second-party endowment policies. The appeal is that others have paid substantially to set policy in the first place, and one will be able (with the help of a financial calculator) to calculate the real value and decide if it is worth taking.
• In-place auctions - Sometimes when stock or assets are too large or too large for an auction house to be transported to their own premises and stores, they will hold an auction within the boundaries of the bankrupt company own. Bidders can find themselves bidding for items that are still installed, and the big advantage of these auctions happening on the spot is that they have a chance to see the items as they are used, and may be able to try them out. Bidders may also avoid the possibility of damaged goods while they are being removed as they can do so or at least supervise the activities.
• Trade private agreement - Sometimes, when looking at the auction catalog, some items have been withdrawn. Usually these items have been sold by 'private agreement'. This means that goods are already sold, usually to traders or dealers in private, behind the scenes before they have a chance to be offered on auction sales. These items are rarely in a single lot - copiers or fax machines will generally be sold in large quantities.
• Charity Auctions - Used by nonprofits, higher education and religious institutions as a method to raise funds for a particular mission or cause both through the act of bidding itself, and by encouraging participants to support cause and make donations personal. Often, these auctions are related to other charity events such as charity concerts.

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Time requirements

Each type of auction has special qualities such as the accuracy of the price and time required to prepare and conduct the auction. The number of simultaneous bidders is very important. Offering is open for a long period of time with many bidders will result in a final bid that is very close to the actual market value. Where there are multiple bidders and each bidder is only allowed one bid, the time is saved, but the winning bid may not reflect actual market value with any degree of accuracy. The special interest and interest during the actual auction is the time elapsed from the moment when the first offer was revealed to the moment that the final offer (victory) has become a binding agreement.

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Characteristics

The auction can differ in the number of participants:

• In a supply (or overturned ) auction, m the seller offers the requested item
• In a request auction, n buyers bid for items sold
• In a double n buyer bids to buy items from m sellers

Price is bid by buyer and requested (or offered ) by the seller. The auction may also be different from the procedure for bidding (or asking, as is likely):

• In an open bidder can repeatedly bid and be aware of their previous bid.
• In closed buyer and/or seller submits a sealed bid

The auction may differ from the price when the item is sold, whether the first (best) price, the second price, the first price unique or other. The auction can set the order price which is the lowest acceptable/maximum price for a good that can be sold/purchased.

Without modification, auction generally refers to an open auction, a request, with or without the order price (or reserve ), with items sold to the highest bidder.

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General use

Public and private auctions are seen in several contexts and almost anything can be sold at auction. Some typical auction arenas include the following:

• An antique business, where in addition to being an opportunity to trade, they also serve as social and entertainment events
• In the sale of collections such as stamps, coins, vintage toys & amp; trains, classic cars, fine art and luxury real estate
• Business wine auctions, where serious collectors can gain access to rare bottles and adult vintages, usually not available through retail channels
• In sale of all types of real property including residential and commercial real estate, agriculture, vacant land and land; this is the method used for tax sales.
• For sale of consumer consumer goods of all kinds, especially agriculture (equipment) and home permits and online auctions.
• Industrial machinery sales, either surplus or through insolvency.
• In commodity auctions, such as fish wholesale auctions
• In cattle auctions where sheep, cattle, pigs and other livestock are sold. Sometimes huge amounts of stock are auctioned off, like regular sales of 50,000 sheep or more for a day in New South Wales.
• In a wool auction where international agencies buy lots of wool
• Horses full of horses, where aged horses and other blood stocks are auctioned.
• In the context of the law in which auction takes place, such as when a farm or a house is sold at an auction on the steps of the courthouse. (Property confiscated for not paying property taxes, or under foreclosure, is sold this way.)
• Ticket travel. One example is SJ AB in Sweden auctioning surplus at Tradera (Swedish eBay).
• Holiday. Various holidays are available for sale online primarily through eBay. Vacation rentals seem to be most common. Many holiday auction websites have been launched but failed.
• Self-storage unit. In certain jurisdictions, if the tenant of the storage facility fails to pay the rent, the contents of the locker may be sold at a public auction. Some television shows focus on such auctions, including Storage Wars and Auction Hunters .

Although not particularly visible to the public, the most economically important auction is a commodity auction in which bidders are business even up to the corporate level. Examples of these types of auctions include:

• Business sales
• The spectrum auction, where the company purchases a license to use parts of the electromagnetic spectrum for communications (e.g., mobile phone network)
• The private electronics market uses a combinatorial auction technique to continue to sell commodities (coal, iron ore, grain, water...) to qualified buyers (based on price and non-price factors)
• Wood auction, where the company purchases a license to enter government land
• Auction of timber allocation, in which the company buys timber directly from the Government Forest Auction
• Electric auctions, where large-scale generators and consumer offer electricity generate contracts
• Environmental auctions, where companies bid licenses to avoid reducing their environmental impact. This includes auctions in emissions trading schemes.
• A debt auction, in which the government sells debt instruments, such as bonds, to investors. Auctions are usually sealed and the uniform price paid by an investor is usually the best non-winning bid. In many cases, investors can also place so-called non-competitive bids, which indicate interest in buying a debt instrument at the resulting price, whatever it is
• Automatic auctions, where car dealerships buy used vehicles for sale to the public.
• Generate auctions, where producers generate links to local wholesale buyers (buyers interested in purchasing large quantities of locally grown produce).

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Bidding strategy

Katehakis and Puranam provide the first model for optimal bidding issues for a company that in each period gets the item to meet random demand by participating in a limited auction order. In this model the valuation of goods comes from the sale of goods obtained through the distribution of their demand, the selling price, the acquisition cost, the residual value and the lost sales. They set up monotonicity properties for optimal value function and dynamic bid policies. They also provide models for cases where the buyer must obtain a fixed number of items at either a purchase-present-fixed price in the open market or by participating in the auction order. The buyer's goal is to minimize the total cost that it expects to obtain a fixed number of items.

Shading bids

Bid shading is placing an offer that is below the actual value of the bidder for the item. Such a strategy risks losing the auction, but is likely to win at a low price. Bid shading can also be a strategy to avoid the Winner's curse.

Appendix or rafter bidding

This is the practice, especially by high-end artists, who raise false offers on key moments of bidding to create a greater demand appearance or to expand the momentum of bidding for a work on offer. To call these non-existent bid auctions might improve their view on a point in the auction space that is difficult for the audience to pin down. This practice is favored in the industry. In the United States, offering chandelier is not illegal. In fact, an auctioneer can raise the price of an item to a reserve price, which is an amount not stated the sender will not sell the item. However, the auction house is required to disclose this information.

In the UK, this practice is legal at the property auction until it does not include reserve prices, and is also known as off-the-wall offers.

Collusion

Whenever bidders at the auction realize the identity of other bidders, there is a risk that they will form "rings" or "ponds" and thus manipulate the auction results, a practice known as collusion. By agreeing to bid only against outsiders, never against members of the "ring", the competition becomes weaker, which can dramatically affect the final price level. After the end of the official auction, unofficial auctions can occur among "ring" members. The price difference between the two auctions can then be shared among the members. The shape of this ring was used as a central plot tool in the opening episode of the British television series 1979 The House of Caradus , 'For Love or Money', discovered by Helena Caradus upon her return from Paris.

A ring can also be used to increase the auction lot price, where the owner of the auctioned object can increase competition by taking part in the offer itself, but out of the offer before the final bid. In the UK and many other countries, rings and other forms of bidding on their own objects are illegal. The shape of this ring is used as a central plot in the episode of the British television series Lovejoy (series 4, episode 3), in which the price of watercolor by Jessie Webb (fictitiously) increases so that others by the same artist can be sold for more than their purchase price.

In an English auction, an artificial bid is an offer made by a fake bidder acting in collusion with an auctioneer or vendor, designed to fool the original bidder into paying more. In the first-price auction, a fake bid is an unprofitable bid designed not to be a winning bid. (The bidder does not want to win this auction, but he wants to make sure to be invited to the next auction).

In Australia, a false offer (shill, schill) is a criminal offense, but a vendor offer or co-owner's offer below the reserve price is permitted, if expressly stated by the auctioneer. These are all official legal requirements in Australia, but may have other meanings elsewhere. The co-owner is one of two or more owners (who disagree with them).

In Sweden and many other countries there are no legal restrictions, but it will severely damage the reputation of the auction house that deliberately allows other offers except the original offer. If the backup is not achieved, this should be clearly stated.

In South Africa, auctioneers may use their staff or other bidders to raise prices as long as it is disclosed before auction sale. The Alliance Auction controversy focuses on vendor offerings and is proven to be legitimate and acceptable in terms of South African consumer laws.

Suggested opening bid (SOB)

Usually there will be an estimate of how much the price will be taken. In an open auction, it is considered important to get at least a 50 percent increase in bid from start to finish. To achieve this, the auctioneer should start the auction by announcing a proposed opening bid (SOB) low enough to be immediately accepted by one of the bidders. Once there is an opening bid, there will be several other higher bids submitted. Experienced auctions often choose SOB which is approximately 45 percent of the forecast (lowest). So there are certain security limits to ensure that there will indeed be live auctions with many bids submitted. Some observations show that the lower the SOB, the higher the winning bid. This is due to the increasing number of bidders attracted by the low SOB.

The chi-square distribution shows a lot of low bids but few bids are high. Offer "appear together"; without some low bids, there will be no high bids.

Source of the article : Wikipedia