Auction Types Overview
In the context of auctions, the main difference between a reverse auction and a regular (or forward) auction lies in the roles of buyers and sellers, and the direction in which the price moves:
Regular (Forward) Auction:
Example: An art auction where various bidders compete to buy a painting, with the highest bid winning the item.
Reverse Auction:
Example: A company needs a bulk supply of office chairs and invites suppliers to bid. Suppliers compete by offering lower prices, and the company chooses the supplier with the most competitive offer.
In summary, the key difference is that in a regular auction, buyers compete to purchase from sellers, driving the price up. In a reverse auction, sellers compete to fulfill a buyer's need, driving the price down.