How to Dutch (multiple) auctions work?
As an example, say we put up for bid 10 vinyl covers. Say there were four winning bidders on this: bidder 1 bid on 4 @ $1.25 ea bidder 2 bid on 1 @ $1.50 ea bidder 3 bid on 4 @ $1.50 ea bidder 4 bid on 4 @ $1.80 ea The total quantity requested for all four bidders adds up to 13, rather than 10. Per the rules of the multiple auction, those with higher bids get first choice for quantities. Therefore, even though bidder 1 had his bid in first, he only received 1 of the covers instead of 4. That’s because his bid was the lowest (i.e. only $1.25 ea). Furthermore, all four winners pay the same price (i.e. the lowest successful bid, which is $1.25). Any others that had bid lower than that amount wouldn’t have won anything in the Dutch auction. Per the special rules of Dutch Auctions, bidders that did not win the quantity desired are not required to purchase them.
