eBay Auction

Unique Bid Auction

Unique bid auctions are a type of auction sale in which the participants bid for a particular item by submitting blind or sealed (ie secret) bids: the winner is the bidder who places the highest (or, in some variants, the lowest) unique bid. A "unique" bid, in this context, means one in which the amount offered is different from that offered by any other participant.

In unique bid auctions, it is normal for bidders to be charged for placing their bid. The seller's payment includes the total of these charges, as well as the actual amount bid by the winning participant. For the buyer, the attraction is that they may acquire an item at well below its true value. This type of auction may be regarded as having some of the elements of a normal auction (placing bids) and of a lottery (paying an entry fee and guessing the bids which may be made by other participants).

Variants

The two most common types are maximum and minimum bid auctions. In a Maximum bid auction, a limit is set for the maximum amount that can be bid. The highest unique bid when the auction is closed wins the auction.

In a minimum bid auction the procedure is the same but the lowest unique bid wins.

Examples of a maximum bid auction

For example, a maximum bid auction sets a limit of