What is a Dutch Auction?

A Dutch Auction is a multiple-item Auction, where there is more than one of the same item for sale. In a Dutch Auction, all winning bidders get their items at the price of the lowest winning bid. There is no Automatic Bidding (Proxy Bids Proxy bidding is allowing the system to automatically bid on your behalf up to your chosen maximum amount.) or Reserve Prices for Dutch Auctions.

When bidding on multiple items you must place the amount you wish to bid on in the quantity field. You can not bid for 1 item, then go back and bid for another 1 item hoping to bid for two. This is because the system reads your highest amount bid for. So if you keep bidding for 1 the system only reads you want to purchase one item.

To purchase multiple items you must enter the higher amount i.e. if you want two items you have to enter 2 in the quantity field once. If you want to place a bid for another item then you will have to re-enter 3 into the quantity field. This will not give you 5, it will over write your previous 2 and change it to 3.

Example: A Dutch auction has 10 items for sale. The opening price for the items is T$1.00 each.

After the auction opens, 20 people place equal bids for the items at T$1.00 each. If the auction were to close at this point, the first 10 people to bid would be declared the winners and win the item at T$1.00, because earlier bids take precedence over later bids of equal amount (and in this case, quantity).

However, before the auction closes, a new bidder places a bid of T$3.00 for one of the items. Because this person has the highest bid, he/she will most certainly win one of the 10 auction items.

The remaining 9 items are won by the first 9 bidders who bid at T$1.00. However, because all bids clear at the lowest winning bid, the person who bid T$3.00 will only be required to pay T$1.00 for the item.

By bidding over opening price, new bidders can essentially knock the earlier low bidders out of the running.

If 10 people decided to bid T$3.00 each then they would all take precedence over the previous bidders who bid T$1.00 and they would all win the item at T$3.00.

The next acceptable bid is not necessarily the lowest bid that has been placed - therefore a transaction may occur higher than this amount, even if all items have not been bid on.

A Dutch auction has 10 items for sale. The opening price for the items is $1.00 each. After the auction opens, 20 people place equal bids for the items at $1.00 each. If the auction were to close at this point, the first 10 people to bid would be declared the winners, because earlier bids take precedence over later bids of equal amount (and in this case, quantity). However, before the auction closes, a new bidder places a bid of $3.00 for one of the items. Because this person has the highest bid, he/she will most certainly win one of the 10 auction items. The remaining 9 items are won by the first 9 bidders who bid at $1.00. However, because all bids clear at the lowest winning bid, the person who bid $3.00 will only be required to pay $1.00 for the item. By bidding over opening price, new bidders can essentially knock the earlier low bidders out of the running.