The term “auction” evokes a vivid image in most people’s minds: a fast-talking auctioneer at a podium, dozens of seated participants, and an assistant parading numbered collectibles across the stage, one by one, as the participants place their bids. The auctioneer quotes an opening price, and participants signal their interest by raising their hands, at which point the bid price is raised by some arbitrary amount. Bidding for each item continues until the current bid price exceeds the amount all but one of the participants is willing to pay.
eBay’s bidding system works a little differently. For one, auctions are timed, and close at a predetermined date and time, regardless of the bid price or whether or not everyone has finished bidding.
Secondly, eBay uses something called "Proxy Bidding,” a system that somewhat compensates for the fact that the auctions are timed. Instead of placing individual bids on an item, you simply specify a single “maximum bid,” and eBay does the rest. Imagine sending someone else to an auction for you, giving them a certain amount of money to bid on a single item. That person, the proxy, would place traditional bids until he wins the auction or runs out of money.
Finally, eBay offers "fixed-price” listings, allowing buyers and sellers to skip the bidding process and complete the deal with a single purchase, as though eBay were just another online store. Furthermore, the "Buy-It-Now” feature allows sellers to turn their auctions ...