Primary types of auction - English auction - UMCGCollectors Helping Collectors
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 Help Topics Primary types of auction
 
 
 
English auction
 

English auction: This is the type of auction commonly used by the English auction houses like Sotheby's, Christie's, and Phillips and J.P.Humbert Auctioneers Ltd. Participants bid openly against one another, with each bid being higher than the previous bid. The auction ends when no participant is willing to bid further, or when a pre-determined "buy-out" price is reached, at which point the highest bidder pays the price. The seller may set a 'reserve' price and if the auction fails to have a bid equal to or higher than the reserve, the item remains unsold. If there is no reserve price, the auction is called absolute.
In some cases, bids may be made by an absentee (called Commission Bidding), by leaving them with the auctioneer, or by phone or by Internet (in which case live bids may also be visible online).

A variant popular in the time of Samuel Pepys was the Candle auction 'auction by an inch of candle' in which the winning (highest) bid was the last one to be made before a small piece of lit candle died out.[3]

Such auctions can be vulnerable to collusion: Two or more bidders act together to win the auction. Following the auction result, the "loser" threatens to sue the winner, who then proposes a settlement. The settlement is actually the pre-agreed reward for the loser's cooperation. This strategy was described by the economist Susan Athey.

 
 
 
 
 
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