With a Dutch Auction, the salesperson brings several
identical articles to the auction.
The salesperson puts the minimum price
that they will sell the items for.
The bidders bid for the number items that they wish to buy and set the price they wish to pay.
After the auction ends, the bidders get their
articles for the amount of their lowest
successful bids.
Example:
Let's assume, a seller has 10 VCRs to sell for $250.00 each.
25 different members offer $250
per VCR. Only 10 bidders in this case
would be successful, since the bids are identical the first bidshave priority .
Let's assume, one of the members offers $275.00 for
a VCR.
Since this bid is higher than others, this becomes
a successful bid.
The other 9 TVs go at the first bidders, at
$250.00, and the End price of each video recorder
amounts to $250,00.
If bidders outbid the minimum amount, the bids increases.
If however in our example less than 10 members
offers 250.00, only the number of video recorders that meet the reserve of $250.00 will actually sell.
