Bids are offers to buy an item for a stated price. Over the course of an auction, bidders may increase their bids in response to other bidders. Typically the bidder who has made the highest final bid wins the item.
An absentee bid is a bid submitted on behalf of someone who cannot be present to bid themselves.
Absolute bid or “jump bid”
This is the term for a bid which is greater than the minimum next bid, thus ignoring incremental bidding. For example, if an item is currently £50, and the minimum next bid is £55, and yet you bid £80 – this would be called an absolute bid. Jump bids are unusually large bids that are much higher than the standard increment.
Autobidding is a form of absentee bidding used on online auction sites. Bidding is carried out automatically by a computer. The computer will automatically outbid any competing bidders – up until a specified maximum price is reached.
Minimum bid/opening bid
This is the minimum bid that must be made by the first bidder in the auction of an item. This may or not also be the reserve price.
Outbidding is when a bidder places a higher bid than the previous bidder.
Overtime bidding/extended bidding
If someone makes a bid in the final few minutes of an auction, the auction may go into overtime bidding. This means the end time will be extended for a specified amount of time, usually around ten minutes.
In auctions, shading is the term used to describe when participants make a bid which they know to be less than what an item is worth. Bidders in first-price auctions will shade their bids in the hope of gaining a bargain if they win. Bid shading may reduce bidders chances of winning, however.
Shill bidding/dummy bidding
‘Shills’ are bidders working on the behalf of the seller. They drive up prices by placing ersatz bids, hoping to provoke a bidding war with other bidders. If the shill ends up winning the auction, the seller loses only the auction fees they have paid, as they will effectively be ‘buying’ the item themselves. Shill bidding is frowned upon, with many online auction sites forbidding employees, friends or family members of a seller from bidding on items.
Sniping is a practice in which an individual places a bid at the last possible moment of an auction, preventing other bidders from competing. This can be done manually, or by special software. Sniping is often disapproved of – but is perfectly legal and is not against the rules of most online auction sites.
The ‘Winner’s Curse’ refers to the situation where the winner ends up paying more than the full market value of the item.