This in an excerpt from this book
This theory finds its origins in field of economics. It is said to be an applied branch of the very same field. In this theory, many ways in which people act in auctions are included. This theory also describes properties possessed by auction markets. An auction may follow a certain rule or set of multiple rules. Such sets of rules are known as auction designs. These designs are also a part of this particular theory. Auction theory is said to be a representation of a standard and utilized design for real life auctions. This theory particularly targets auction designs for public sector companies and the use of sale of license.
Some main parts of this broad theory about auctions may also include the following:
Optimal bidding strategies
Every individual that is familiar with economics or is building up his career in the field of economy or corporate is most likely to be very much familiar with the term auction. Auction is indeed a simpler term to understand. Main goal of auction is to put an effort to sell selective stuff at a most convincing and affordable rate according to sellers prospective. This statement can be said most simple definition for auction. According to a more descriptive and professional definition, Auction is a public or private sale (In many cases) in which the sellers makes a deal with the bidder that offers highest amount for the respective stuff. Some experts also consider that auction can be called a system for selling since it is holds a well-structured format. According to this theory or concept, the definition for auction is, ‘It is a system, in which competitive bids from potential buyers are placed on stuffs that is put for sale. The selling item can be a property or even goods. The goods are handed over to the highest bidder in exchange of the price that he previously offered for the very same item. Both seller and buyer [in most cases it is seller only] have to pay a small fee to the auctioneer for listing the item. Usually, sellers pays the fees for listing the item in particular auction and buyer pays entry fees o get the right to bid from the auctioneer. Once the deal has been finalized or bids have put on the item, seller have no right to refuse to pay the fees in any terms, not even if the item is not sold at a desired price or revenue. Most of the modern auctioneers make a legal contract with both sellers and bidders so they are not caught in such situation where buyer and sellers make a deal and refuse to pay fees for their services or intermediation, whatever it is called.
All the concepts that are related to auction in any way are included in Auction theory. Like any other theories, it explains all terms related to the field while making sure that the description is much likely related to the main subject.
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