Dutch Auction
A Dutch auction works with a price clock ticking backward. The clock starts with a high price, and every second, the price drops by a tiny amount. The bidder that hits the button first receives the item and has to pay the price that was displayed at the clock.
The strategy with this auction type is to bid strategically. If a participant waited exactly until the price dropped to his willingness to pay, he wouldn’t make any profit. Hence, he will wait until the price is a bit lower than his willingness to pay. Of course, he risks that another participant hits the button first and buys the item. Therefore, each participant must not wait too long before hitting the button.
You can get an idea of how the price clock works in flower auctions in Aalsmeer, Netherlands.
| Property | Characteristic |
| Bidder | Buyer |
| Bid open/sealed | Open |
| Bids increase or decrease | – |
| Bid order | Price decreases |
| Winner | Bidder with the highest bid |
| Final price | Price of the highest bid |
| End of auction | First participant bids |
| Strategy | Bid strategically |
