Multiple Item Auctions
A Multiple Item, also known as a Dutch auction, is where the auctioneer has two or more items that
are exactly the same and is willing to break them up to sell to individual
bidders. If the auctioneer wants to sell multiple items as a single lot to
a single bidder, he/she should use a Standard auction. In a Multiple Item
auction, there is also a difference as to how winning bids are determined and broken
down. There can be multiple winning bidders in a Multiple Item auction. The winning
bidders are determined by who has bid the highest, earliest and for what
quantity of items. However, all winning bidders will pay the same winning bid amount,
which is determined by the lowest successfully winning bid. Multiple Item auctions can not
have a Reserve price in effect and does not permit Proxy bidding.
For Example, a Multiple Item auction has been placed with 10 items for sale.
The opening price for the items is $1.00 each.
After the auction opens, 20 people place equal bids for the items at $1.00 each.
If the auction were to close at this point, only the first 10 people to bid would be declared winning bidders.
Earlier bids take precedence over later bids of an equal amount (and in this case, quantity).
However, before the auction closes, a new bidder places a bid of $3.00 for one of the items.
Because this person has placed the highest bid, if the auction were to close now,
he or she will win one of the 10 auction items.
The remaining 9 items are won by the first 9 bidders who bid at $1.00.
However, because all bids will be accepted at the lowest winning bid,
the person who bid $3.00 will only be required to pay $1.00 for the item.
By bidding over opening price, new bidders can essentially knock the earlier low bidders out of the running
which helps guarantee then a higher placing.