An English auction is a type of auction, whose most typical form is the "open outcry" auction. The auctioneer opens the auction by announcing a Suggested Opening Bid, a starting price or reserve for the item on sale and then accepts increasingly higher bids from the floor consisting of buyers with a possible interest in the item. Unlike sealed bid auctions, "open outcry" auctions are "open" or fully transparent as the identity of all bidders is disclosed to each other during the auction. The highest bidder at any given moment is considered to have the standing bid, which can only be displaced by a higher bid from a competing buyer. If no competing bidder challenges the standing bid within a given time frame, the standing bid becomes the winner, and the item is sold to the highest bidder at a price equal to his or her bid. More generally an auction mechanism is considered "English" if it involves an iterative process of adjusting the price in a direction that is unfavorable to the bidders (increasing in price if the item is being sold to competing buyers or decreasing in price in a reverse auction with competing sellers). In contrast, a Dutch auction would adjust the price in a direction that favored the bidders (lowering the price if the item is being sold to competing buyers, increasing it, if it is a reverse auction). When the auction involves a single item for sale and each participant has as an independent private value for the item auctioned, the expected payment and expected revenues of an English auction is theoretically equivalent to that of the Vickrey auction, and both mechanisms have weakly dominant strategies. Both the Vickrey and English auction, although very different procedurally, award the item to the bidder with the highest value at a price equal to the value of the second highest bidder.
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Famous quotes containing the words english and/or auction:
“What a prodigious growth this English race, especially the American branch of it, is having! How soon will it subdue and occupy all the wild parts of this continent and of the islands adjacent. No prophecy, however seemingly extravagant, as to future achievements in this way [is] likely to equal the reality.”
—Rutherford Birchard Hayes (1822–1893)
“The white American man makes the white American woman maybe not superfluous but just a little kind of decoration. Not really important to turning around the wheels of the state. Well the black American woman has never been able to feel that way. No black American man at any time in our history in the United States has been able to feel that he didn’t need that black woman right against him, shoulder to shoulder—in that cotton field, on the auction block, in the ghetto, wherever.”
—Maya Angelou (b. 1928)