The development of auctions has had an interesting history. Though some recorded references were recorded in 500 BCE, but in actual form it was the 17th century where the auctions actually took shape. This was an era of ship building, discoveries of international routes and people moving for trade in relatively larger volumes. The war conquests were auctioned in impromptu auction in back lanes of London or the ships were auctioned in Paris, it was an interesting phase for auctions.
Over the years, auction became formalized, structured and widely accepted norm for selling. Though there were regional adaptations, but more or less modalities remain the same.
Broadly, there are 3 types of auctions
The forward auction is the most common type of auction — a seller offers item(s) for sale and expects the highest price. A reverse auction is a type of auction in which the roles of the buyer and the seller are reversed, with the primary objective to drive purchase prices downward. While ordinary auctions provide suppliers the opportunity to find the best price among interested buyers, reverse auctions give buyers a chance to find the lowest-price supplier.
A double auction is a combination of both forward and reverse auctions, in which the auctioneer takes bids from both buyers and sellers in a market of multiple goods. In domain of commodities, auctioneer, an entity is bidding for purchasing it and simultaneously taking the bids for selling it. Though not prevalent in India formally, but it fairly gives an idea of how the price mechanism works
Over the decades, there were regional adaptions to the auctions. Few noteworthy are:
