Unique bid auction

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A Unique bid auction is a type of strategy game related to traditional auctions where the winner is usually the individual with the lowest unique bid, although less commonly the auction rules may specify that the highest unique bid is the winner. Unique bid auctions are often used as a form of competition or lottery.

[edit] Mechanism

This type of auction requires bidders to place bids that are unique. That is, for a bid to be eligible to win no other bidder can have made a bid for the same amount. Bidders are generally able to place multiple bids and the number of current bids at each amount is typically kept secret.

There are two major variants of unique bid auctions:

Highest Unique Bid:
the bid that is the highest and unmatched when the auction closes is the winning bid. A maximum bid value is usually set at a much lower level than the actual value of the lot.

Lowest Unique Bid:
the bid that is the lowest and unmatched when the auction closes is the winning bid.

A Unique bid auction may run as follows:

If the auction declares the lowest unique bid as the winner, then the player who submitted a bid of $0.06 would win the auction, and would be eligible to purchase the product or service for $0.06, because their bid was the lowest unique bid. If the auction was for the highest unique bid as the winner then the player who submitted a bid of $0.08 would win the auction.

A $30,000 item can be won for pennies this way. However, the true price may be more than a penny as the auction site may charge a fee for the right to bid, or a fee per bid.

In this type of auction the bids of other participants are necessarily secret, although some companies may provide broad guidance following a bid, such as whether the winning unique bid is higher or lower than one's last bid.

Unique bid auctions will typically allow bids to be very precise, in that each bid can be specific to the 'penny'.

Virtually all instances of unique bid auctions are heavily dependent on the use of technology, in that they are either run solely using mobile technology (e.g. bidders submit their bids via text messages) or they are on-line auction sites, or both.