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In economics, a reservation (or reserve) price is a limit on the price of a good or a service. On the demand side, it is the highest price that a buyer is willing to pay; on the supply side, it is the lowest price a seller is willing to accept for a good or service. Reservation prices are commonly used in auctions, but
In contrast, if the seller does not announce the reserve price before the sale, it is a secret reserve price auction. [64] However, potential bidders may be able to deduce an approximate reserve price, if one exists at all, from any estimate given in advance by the auction house. The reserve price may be fixed or discretionary. In the latter ...
As Maskin and Riley then showed, this is equivalent to excluding bids over certain intervals above the optimal reserve price. Bulow and Klemperer (1996) have shown that an auction with n bidders and an optimally chosen reserve price generates a smaller profit for the seller than a standard auction with n+1 bidders and no reserve price. [29]
A no-reserve auction (NR), also known as an absolute auction, is an auction in which the item for sale will be sold regardless of price. [1] [2]From the seller's perspective, advertising an auction as having no reserve price can be desirable (but risky) because it potentially attracts a greater number of bidders due to the possibility of a bargain. [1]
A Dutch auction is one of several similar types of auctions for buying or selling goods. [1] [2] [3] Most commonly, it means an auction in which the auctioneer begins with a high asking price in the case of selling, and lowers it until some participant accepts the price, or it reaches a predetermined reserve price.
A first-price sealed-bid auction (FPSBA) is a common type of auction. It is also known as blind auction. [1] In this type of auction, all bidders simultaneously submit sealed bids so that no bidder knows the bid of any other participant. The highest bidder pays the price that was submitted. [2]: p2 [3]
Auction reserve, a minimum amount of money bid required for a sale, e.g., in an English auction; No-reserve auction (NR), also known as an absolute auction, an auction in which the item for sale will be sold regardless of price; Reserve price, the underlying concept
Many sellers put reserve prices on their stock specifically to prevent this from happening. The reserve price is not disclosed publicly and a “winning” auction offer price is only considered a sale if the reserve price is met. Sellers have the option to re-list vehicles that did not sell at a particular auction.