There are mainly two types of auctions, but these have many variations within them. The two types are simply called primary auctions and secondary auctions.
- The English auction is the most common type of auction. It is also known as the open ascending price auction. The participants openly bid against one another with the price getting higher with each bid. Bidders can call out the amounts of bids or an auctioneer can announce them. The auction ends when no one is willing to bid a higher amount than the previous bid.
- The Dutch auction is the opposite of the English auction in that it is an open descending price auction. The auctioneer starts with the highest bid and bidders bid lower prices until a bidder is willing to accept the price set by the auctioneer.
- Sealed first-price auctions refer to the process of bidders submitting sealed bids at the same time. The participants do not know what bids the others submitted, nor do they know how many bids were submitted. There is usually a time frame with a specified time and date for bidder to make their submissions. This is usually the form of auction used for tendering of projects.
- A Vickrey auction is the same as the sealed first price auction except that the winner pays the second highest price rather than the highest. This may or may not be the amount the participant included in his/her bid.
- In All Pay auctions, bidders must pay the amount of the bid whether or not they win the bid.
- A buyout auction has a set price that any bidder can accept at any time during the bidding process. The acceptance of this price ends the auction and all other bidding.
- Combinatorial auctions are often held where sellers have a collection of objects to auction off. The bidder must bid on the collection rather than one or two objects. The bidder with the highest bid is not necessarily the winner because some participants can bid a high price on one item and a lower price on another, but agrees to accept both if the bid is accepted.
- In a no reserve auction the item being auctioned off will be sold regardless of the price. In this type of auction, bidders try to get the items for the lowest possible price.
- A reserve auction is one in which the item may not be sold if the highest price bid does not meet with the price that the seller expects to receive.
- In a reverse auction the roles of the buyer and seller and reversed. Buyers compete to lower the price and sellers complete to sell their items.
- In a silent auction, bids are written on paper and there is no sound whatsoever from the bidders. The auctioneer can also call out bids and bidder acknowledges that they accept this bid with a nod or a raised hand. The bidder with the highest bid wins.
- A Walrasian auction is one in which an auctioneer takes bids from participants who are both buyers and sellers. The lower prices increase the demand for the items, whereas higher prices decrease the demand.