auction

Common name for several types of sales where the price is neither set nor arrived at by negotiation, but is discovered through the process of competitive and open bidding. The two major types of auction are (1) Forward auction in which several buyers bid for one seller's good(s) and (2) Reverse auction in which several sellers bid for one buyer's order. An auction is complete (and a binding contract is created) when a bid is accepted by the seller or the buyer (as the case may be). The internet age has transformed auction into a truly open process in which thousands of goods (from books to ships) and services (from air travel to legal advice) may be offered for bidding by anyone from anywhere and at any time on websites such as eBay.com. Internet auctions are an important aspect of electronic commerce.