The English Auction, also called the Open Ascending Auction or the Open Outcry Ascending Auction, is one of the most common types of auctions. English auctions are live auctions, meaning that bids happen in real time. This type of auction can be conducted online or in person, with the online English auctions lasting much longer than the in-person ones.
In an English auction, only one item is put up for sale at a time. The auctioneer starts out by presenting an opening bid, or a starting bid, for the item, which can be zero or greater than zero. If the starting bid is accepted, bidders present their bids, with each bid amount being higher than the last.
Typically, there’s a requirement on the size of the increase of the bids, called a bidding increment. The highest bidder wins the auction when no one will bid a higher amount within the time allotted. The winning bidder then gets the auctioned item at the price of their standing bid.
In the situation that none of the bidders accept the starting or opening bid, or in other words, no one bids at or above the starting price, one of a few things can happen. The auctioneer may start lowering the starting bid in increments until someone makes a bid, or they allow bidders to bid prices lower than the starting price. Or, depending on what the bids are and what the auctioneer wants, they may not sell the item at all.
What makes English auctions unique is the "open" aspect (hence the other name, open ascending auction). Bidders make their bids openly, so all bidders are aware of who makes each bid. Additionally, bidders get to revise their bids (or make new bids that override old bids) as the auction goes on.
Variations to the English auction also exist. In the traditional English auction, bids are called out. In other types of English auctions, bids can be made with signals instead, such as raising a bidding paddle or nodding one's head when the auctioneer looks at them. Another variation called bid jumping involves placing a bid that's higher than the next bid increment. Lighthouse bidding involves raising a bidding paddle and keeping it raised, indicating you'll continue bidding indefinitely to win the auction.
Each method of bidding for English auctions has its pros and cons. If you're looking to develop an auction eCommerce platform with English auctions, which variation(s) you'll want to allow on the platform will depend on your business model.