Trivia

Hard

What Type Of Auction Ends After The First Bid?

Dutch
Vickrey
English
Blind
Photo of a 1957 Dutch auction in Germany to sell fruit.
The German Federal Archive/Rolf Unterberg/Wikimedia

Answer: Dutch

When most people think about auctions, whether in person or online like eBay, they think of an English style auction wherein the bidding opens, the bidders increase their bids, and then the bidding closes with the auctioned item awarded to the highest bidder. Really popular items in such an auction system can have dozens to hundreds of bids before the process is complete.

By contrast, a Dutch style auction offers a completely different format where instead of the bidders driving the price up and the item going to the highest bidder, the auctioneer drives the price down and the winner is the first bidder to bite. Why use a Dutch auction? Let’s use the example of a used car auction. Let’s say a company is auctioning off a car that has a reasonable value of $10,000 and they would like to get close to that value. If they auction off the car using the traditional English style, they run into two problems right out of the gate. If they set the starting price too low and there isn’t a lot of interest in the auction, then there’s a good chance that the car will get snapped up for well below value. If they start with the price too high, there’s a good chance that nobody will buy it.

With a Dutch auction, however, they can set the price well above the real value of the car—say, $16,000—and then the bidders wait for the auctioneer to lower the price. Now it becomes a game of, “Is that a worthwhile price to me?” for the bidders and there’s a good chance that somebody will place the single winning bid somewhere around the real world value of the car because, as it approaches or passes the $10,000 mark, they’ll be worried about losing their chance to own it.

Trivia

Hard

Kintsugi Is The Japanese Art Of Repairing Pottery With?

Trivia

Very Hard

If You’ve Been Told A Factoid, You’ve Been Told What?

Trivia

Hard

The Largest Impact Crater In The Solar System Is Located On?

Trivia

Easy

Where Were Scenes For The Star Wars Planet Tatooine Filmed?

Trivia

Hard

The Country With The Largest Population Of Camels Is?

Trivia

Hard

What Was The First Sci-Fi TV Show To Enjoy Widespread Internet-based Promotion and Discussion?

Trivia

Easy

Which Action Movie Star Won An Emmy For His Guest Appearance On The TV Show Friends?

Trivia

Hard

Which Popular Service Was Initially Considered An April Fools’ Joke?

Trivia

Hard

The Addams Family Franchise Started Off As A?

Trivia

Very Hard

Behind Bees, The Most Prolific Pollinators Are?