The Dutch Auction is a type of Auction that is available on eBay and is used when a seller
has multiple identical items on offer
Some Key Points about Dutch Auctions are
- When bidding you specify a price (per item) and the number of items that you want.
- You can change your bid, provided the overall price you are offering is higher then your current bid,
ie if your
current bid was for one item at £5, you could change that to 2 items for £3 each.
- The minimum bid will equal the current winning value plus the standard bid increment for that value.
- Warning Proxy Bidding is not used in Dutch Auctions, so depending on how many people bid and the price they bid you might have to pay the amount you bid, in full, for the items.
Example 1 |
Dutch Auction, 5 Widgets, Start £1,
Current Bid £1 |
| Bidder ID | Bid Amount | Quantity | Date of Bid |
| Bidder06 | £1.10 | 1 | Day 6 |
| Bidder01 | £1 | 1 | Day 1 |
| Bidder02 | £1 | 1 | Day 2 |
| Bidder03 | £1 | 1 | Day 3 |
| Bidder04 | £1 | 1 | Day 4 |
| Bidder05 | £1 | 1 | Day 5 |
|
- Until all 5 items in the auction have a potential buyer each bidder is able to bid the starting amount.
- In this example Bidder05 was the last person to place a bid for £1 and will not be one of the winners
due to Bidder06's bid
- If this Auction ended at this point Bidder06, 01, 02, 03 & 04 would be the winners
and would pay £1 per Widget.
|
Example 2 |
Dutch Auction, 5 Widgets, Start £1,
Current Bid £2 |
| Bidder ID | Bid Amount | Quantity | Date of Bid |
| Bidder03 | £3 | 2 | Day 3 |
| Bidder02 | £2 | 5 | Day 2 |
| Bidder01 | £1 | 3 | Day 1 |
|
- If this Auction ended at this point Bidder03 would get 2 widgets for £2 each & Bidder02 would be
offered 3 widgets for £2 each.
As Bidder02 is not getting all 5 widgets which they wanted they are allowed to refuse, in which case
Bidder01 could be offered the 3 widgets for £1 each.
|
Example 3 |
Dutch Auction, 5 Widgets, Start £1,
Current Bid £3 |
| Bidder ID | Bid Amount | Quantity | Date of Bid |
| Bidder03 | £10 | 2 | Day 3 |
| Bidder05 | £4 | 1 | Day 5 |
| Bidder04 | £3 | 2 | Day 4 |
| Bidder01 | £1 | 2 | Day 1 |
| Bidder02 | £1 | 1 | Day 2 |
|
- In this example Bidder03 has bid high helping to ensure he wins the 2 widgets he wants.
- If this Auction ended at this point Bidder03, 05 & 04 would get the quantities they requested for £3 each.
- To work out who the current winners are on a Dutch Auction you work your way down the list totaling up
the quantities required until all the available items are accounted for, the price that the last winner has
offered is the current winning value, which is what all the winners will pay if you are looking at an ended auction.
|
This is eBay's
Dutch Auction Explanation from their FAQ.
|
Your Comments / Thoughts / Additions / Corrections etc 
