The document outlines different auction types: reverse, Vickrey, Japanese, and Dutch auctions, detailing their definitions along with pros and cons. Key points include price pressure, item handling capabilities, transparency, and usability for varying bidder scenarios. Each auction type has distinct characteristics affecting their suitability based on item variance and bidder participation.

1. Definition Pros Cons
Sellers bid the lowest price
they are willing to sell an item
for bidding activity stops when
the auction duration is
complete. The items is bought
from the lowest bidder at
their bid price.
• Maximum pressure on
price
• Possibility to auction
multiple lots at the same
time
• Transparency in the
negotiation process
• Focus on price instead of
quality
• Not suitable for items with
an high possible variance
in price
• Can’t be used with only
one bidder
Definition Pros Cons
A Vickrey auction is a variant of
a sealed bid auction. Sellers
submit bids without receiving
any feedback regarding their
bid’s competitive ranking. The
item is then awarded to the
lowest bidder at the second
lowest bid
• It is fast and easy to use
• It can be used for multiple
items with a possible high
variance in price
• It can be used with minimal
one bidder
• Minimal incentive for
bidders to compete on
price
• No transparency for
bidders that the evaluation
of the bids were done
correctly
Definition Pros Cons
In a Japanese auction, after
every bid, each seller must
signal their willingness to
remain in the auction at the
current price. The auction is
over when only one seller
remains or a pre-set number of
sellers remain
• It can handle a higher
variance in price and less
pressure on price than a
reverse auction
• Possibility to auction multiple
lots at the same time
• It can be used with minimal
one bidder
• Not the fastest method of
auction
• No full transparency for
bidders
• Not the most easiest
auction to built and use
Definition Pros Cons
In Dutch auction a buyer
begins with a very low price
which is raised until some
seller is willing to accept the
buyer's price, or a
predetermined reserve price
(the buyer's maximum
acceptable price) is reached.
• It can handle a possible
high variance in price
• It is fast and easy to use
• It can be used with minimal
one bidder
• Only possible to auction
one lot or item
• Focus on price instead of
quality
• No market information for
the buyer
@f0verbeek