What is a Dutch auction? What are the characteristics of a Dutch auction?

A Dutch auction is one in which the auctioneer first sets the price at a level high enough to discourage all bidders, then shouts from high to low, and the first bidder to respond wins and pays the price shouted at the time .

The Dutch auction has two distinctive features:

1. The price decreases at certain intervals, from high to low, according to a pre-determined ladder of decreasing prices.

2. All buyers (i.e., those who bought the items) are sold at the final bid (i.e., the lowest bid of all buyers). In fact, there is a bidding increase in Dutch auctions, and not always a bid reduction. When there is more than one bidder at the same price, the auctioneer will immediately switch to the auction format, and then the bidding process continues until no one to increase the price. The last bidder to raise the price of the successful purchase. In fact, in most cases, the Dutch auction is a mixture of price increase and price reduction auction, so it is also called "mixed auction".

A Dutch auction auction type

1. Artificial silent auction:

It is an early form of traditional price reduction auctions, is the auctioneer first reported the highest price, and then by the buyer according to the bidding one by one. Where no one responds to the price, the auctioneer thus decreases the new price, one by one, the process continues until someone buys; Where more than two responds to the price, the auctioneer should be increased by the new price, that is, immediately into the form of increasing the price of the auction, the process of bidding continues until no one to increase the price.

2. Dial silent auction:

Also invented by the Dutch, is a modernized form of price reduction auction. That is to say, the first by the auctioneer public reported the highest price, with the electronic auction clock on the corresponding scale shows, and then by the buyer press the electric button one by one, where no one should bid, the auction clock hand rotates counterclockwise, said the decreasing price reduction, until someone pressed the button to make it stop to indicate the purchase until. Where more than two bidders, the auction clock hands rotate clockwise, indicating an incremental increase in price, until the last person left to make the button to stop. Here, the electronic auction clock replaces the wooden gavel as the closing tool.

Two, the modern Dutch auction operation is:

Lots from the seller to the auction market, after quality control and information entry in the auction market by the auction market in a randomly set order by the cart into the auction hall, the name of the product, the number of quality, quality, supplier, the minimum amount of information such as purchases are displayed in the auction clock; the auction price is quoted by the auctioneer on behalf of the seller, and the auction price is from high to low, and one by one, down, once someone answered the bid (by the price), the price will be increased by one. Down, once someone should bid (press the button) cursor that is to stop turning, the cursor stopped position is the price of the transaction. Subsequently, the bidder (buyer) through the microphone to tell the auctioneer the number of required, in the auctioneer will be this value into the computer, the computer that is to calculate, if the formula is satisfied: the bidder should be the price × the number of required ≤ bidder pre-deposit of the transaction deposit, then the transaction.