ABSOLUTE AUCTION Meaning and
Definition
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An absolute auction refers to a type of auction where the item being sold is guaranteed to be sold to the highest bidder, regardless of the final bid amount. In an absolute auction, there is no predetermined minimum bid or reserve price set by the seller. This means that once the auction begins, the item will be sold to the highest bidder, even if the bid is significantly lower than the seller's expectations or the perceived value of the item.
The concept of an absolute auction ensures a fair and transparent process, as potential buyers have an equal opportunity to bid on the item without any restrictions or minimum requirements. This type of auction is often used for highly sought-after items or unique properties where the market demand may be uncertain or difficult to predict.
Absolute auctions are commonly used in real estate, art, collectibles, and other high-value items. They provide a certain level of excitement and adrenaline for both bidders and sellers, as the final sale price is solely determined by the competitive bidding process. It also eliminates any negotiations or contingencies that may arise in other forms of auctions, ultimately leading to a swift and decisive sale.
Etymology of ABSOLUTE AUCTION
The word "absolute" in the term "absolute auction" comes from the Latin word "absolutus", which means "unrestricted" or "complete". The term "auction" has its roots in the Latin "auctio", which means "increasing" or "augmenting". Over time, "auction" came to refer to a public sale where goods or property are sold to the highest bidder. Combining these two words, "absolute auction" refers to an auction where items are sold without any minimum or reserve prices, meaning that the highest bidder is obligated to purchase the item.
