what is auction

An auction is a process of buying and selling goods or services by inviting competitive bids from potential buyers. The participants bid openly against one another, with each subsequent bid required to be higher than the previous bid. The item is then sold to the highest bidder or bought by the lowest bidder. Auctions can be conducted in various formats, including open or closed auctions, live or online auctions, and forward or reverse auctions. In a forward auction, the bids increase during the auction, and the highest bidder wins the item or service. On the other hand, in a reverse auction, the bids decrease during the auction, and the lowest bidder wins. Auctions are commonly used for selling real estate, commodities, and various goods, and they have also been conducted historically for transferring ownership of slaves.