What type of auction typically has the item sold to the highest bidder?

An absolute auction is a type of auction where the item is sold to the highest bidder without any reserve price or minimum bid requirement. This means that regardless of the final bid amount, the item must be sold to the highest bidder, which creates an atmosphere of excitement and competitiveness among bidders. The absence of a reserve encourages more participants to bid enthusiastically, knowing that they have a fair chance of winning the item as long as they are the highest bidder at the close of the auction.

In contrast, a reserve auction may have a minimum price that must be met before the item can be sold, which means it might not always go to the highest bidder if the reserve is not met. A sealed bid auction typically involves bidders submitting their bids confidentially, and the highest bid is revealed only after all bids are submitted, which can lead to different dynamics compared to an absolute auction. An online auction can be structured as either an absolute or reserve auction, depending on the terms set by the seller. Therefore, absolute auctions are distinctly characterized by the commitment to sell the item to the highest bidder without any conditions.