 An auction is a process of buying and selling goods by offering them up for bid, taking bids, and then selling the item to the winning bidder.
In economic theory, an auction is a method for determining the value of a commodity that has an undetermined or variable price.
There are several variations on the basic auction form, including time limits, minimum or maximum limits on bid prices, and special rules for
determining the winning bidder(s) and sale price(s). Participants in an auction may or may not know the identities or actions of other
participants. Depending on the auction, bidders may participate in person or remotely through a variety of means, including telephone and
the internet. Auctions are generally funded by a fee paid by the seller to the auctioneer or auction company.
Auction theory is an applied branch of game theory which deals with how people
act in auction markets and researches the game-theoretic properties of auction
markets. There are many possible designs (or sets of rules) for an auction and
typical issues studied by auction theorists include the efficiency of a given
auction design, optimal and equilibrium bidding strategies, and revenue
comparison. Auction theory is also used as a tool to inform the design of
real-world auctions; most notably auctions for the privatization of
public-sector companies or the sale of licenses for use of the electromagnetic
spectrum. |
price Auction
