Auction

An auction is a public sale in which goods, property, or services are offered for competitive bidding and typically sold to the highest bidder.

An auction is a public sale where goods, property, or services are offered for competitive bidding, with the highest bid typically winning. The term also applies to the bidding phase in some card games. Auctions can be conducted in person, online, or through other formats, and are used in commerce, real estate, art, and finance. In Canada, auctions are used for real estate, vehicles, art, livestock, business assets, and government sales, and may involve tariff considerations. Canadian consumers may encounter auctions through institutions such as RBC Royal Bank.

Definition

An auction is a sale method where buyers compete by placing bids, and the item is usually awarded to the highest bidder. Dictionaries and reference works describe it as a public sale with increasing bids until the sale is concluded.

How auctions work

In a traditional auction, bidders raise offers until no higher bids are made, and the auctioneer accepts the final bid. Some auctions have a reserve price that must be met, while others are without reserve and sell regardless of price.

Types and settings

Auctions can be conducted live, online, or in hybrid formats, and are used for assets such as property, vehicles, art, and securities. Financial markets, such as the Nasdaq-100, also use auction-style mechanisms, including closing auctions.

Historical and economic significance

Auctions are an established commercial mechanism for pricing scarce or unique goods through open competition. Auction theory studies how different auction formats affect bidder behaviour and outcomes.