What eBay is. Any sale process is fundamentally an auction, in the sense that buyers make various offers and the seller (usually) takes the highest bid. However, the traditional auction - the kind with some guy saying incomprehensible things at a speed reminiscent of a benzedrine-addicted hummingbird, punctuated with occasional gavel bangs - represents the typical selling process amplified by a short-term intensity and a certain competitive edge.
There are various types of auction. There's the live auction, which can include the stereotypical fast-talking auctioneer and people shouting out their bids. It might also resemble the scene from every art heist movie where the auctioneer suggests prices and staid well-dressed people signify their bids by waving paddles in the air.
The live auction, what we think about when we think about an auction, is also sometimes called an English auction.
There's also sealed bid auctions. Here, buyers submit secret bids in sealed envelopes and people don't know the other bids. The highest offer from the sealed bids wins the auction.
Then, of course, there's the online auction, the type made popular by eBay.
Auctions come in highly specialized flavors as well.
There's the Dutch auction, which has the auctioneer start with a very high price and lower it until someone says they are willing to buy it (we're guessing the Dutch don't like to waste time and would rather avoid direct competition).
There's the Japanese auction, which proceeds like a typical auction, but with certain requirements on the bidders. For instance, once things get going, no new bidders can jump in and the action proceeds in rounds, with the bidders either deciding to press on or drop out with each subsequent round. Based on this, we're guessing spelling bees are big in Japan.
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Finance: What is an Auction Market?13 Views
Finance a la shmoop... what is an auction market.. next up on the block [Man speaking on stage]
we've got stock in the company comb Depot....
okay yeah so the New York
Stock Exchange is an auction market and you have no idea how much caffeine I had [Man holding a monster energy drink]
to have to get that right which means that the prices on the new york stock
exchange happen during a bidding process we're matching offers get you know [People frantically rushing to bid for stocks]
matched... buyers and sellers buy and sell at the
same time so in essence two transactions are happening at once the opposite of
this sort of market is the over the counter or OTC market where dealers are
the ones holding all the cards and they ultimately determine the price by [Dealer with the cards]
creating a spread from where they're willing to sell your shares and what
price they'll pay to buy your shares but in an OTC market well you don't get to [Dogs running side by side]
feel like you're watching the last leg of a greyhound race so you don't get all
my caffeinated auction talk there which is kind of cool we like that, right..right?
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