Comparison of Four Basic Types of Auctions

Abstract

Auction is a good way for people to exchange their goods and services and is essential to our daily life. Auctions can be classified into various genres and kinds depending on their unique rules. In this essay, I focused mainly on the four basic kinds of auctions: First-Price sealed-bid auction, Second-Price sealed-bid auction, Ascending-bid auction and descending-bid auction. I also tried to use several simple models to find out the characteristics and optimal strategies for each of the auction. Having their own advantages and weakness, different auctions should be used depending on specific situations to further maximize the efficiency of the auctions.