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Group Buy auctions are also known as Social Bids. In the traditional Group Buy auction, a single offering begins for a fixed number of identical or substantially identical units of a product or service. Participants submit their offer and specify the quantity.

All participants' highest bids are accounted for even if offers are submitted at varying price levels and regardless of whether a bid falls below a specified sales price.

This invention relates generally to the sale of products and services and more specifically to systems and methods for increasing the volume of sales transactions between a single vendor and one or more perspective buyers in a sales offering including one or more identical or substantially identical products or sets of products and/or services that are limited in quantity within a specified time period for example through a website on the Internet. Wherein the sale of products and services is contingent on perspective buyers each submitting their highest offer price for quantity of one or more of a product or service which are mathematically averaged or otherwise calculated compared to the available quantity in order to reach a median or otherwise calculated price which is then compared to a hidden sales trigger price selected by the vendor or a third party to determine who the buyers are and maximize the volume of sales transactions.

Numerous retailing and auction formats exist, however, all of them have one or more of the deficiencies outlined above – namely none of them are conducive to selling volume of an identical or substantially identical product or service and maximize revenue in a single offering.

Consumers place their top bids on products made available by vendors who, much like priceline, set a hidden pre-determined trigger price. Even if some buyers bid less than the hidden target price, all quantity can be sold so long as the average bid level reaches or exceeds the target price. As soon as the average price compared to the entire quantity reaches or exceeds the target price, the deal closes and the products are sold. In the event that the pre-determined promotion period expires with fewer bids than the quantity of product available, the average bid is compared to the target price. If the average bid reaches or exceeds the target price, the products are sold. If the average bid falls below the target price, the lowest bids are incrementally dropped and a revised average is created until the average bid reached or exceeds the target price. Bidders whose bids were below the target price are sent a sales offer by email.

Group Buy auction also known as Smart SKUs.[4] In the traditional Dutch auction the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price.[14] The winning participant pays the last announced price.[4] The Dutch auction is named for its best known example, the Dutch tulip auctions. ("Dutch auction" is also sometimes used to describe online auctions where several identical goods are sold simultaneously to an equal number of high bidders.[15]) In addition to cut flower sales in the Netherlands, Dutch auctions have also been used for perishable commodities such as fish and tobacco.[14] In practice, however, the Dutch auction is not widely used.[4]

A Dutch auction is a type of auction in which the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined reserve price (the seller's minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a so-called clock auction or an open-outcry descending-price auction.

This type of auction is convenient when it is important to auction goods quickly, since a sale never requires more than one bid. Theoretically, the bidding strategy and results of this auction are equivalent to those in a sealed first-price auction. Auction process

In a Dutch auction, the item being sold is initially offered at a very high price, well in excess of the amount the seller expects to receive. Bids are not sealed, as they are in some types of auctions. The price is lowered in decrements until a bidder accepts the current price. That bidder wins the auction and pays that price for the item. For example, suppose a business is auctioning off a used company car: the bidding may start at $15,000. The bidders will wait as the price is successively reduced to $14,000, $13,000, $12,000, $11,000 and $10,000. When the price reaches $10,000, Bidder A decides to accept that price and, because he is the first bidder to do so, wins the auction and has to pay $10,000 for the car. Contents

1 Auction process 2 A second item auction 3 Public offerings 4 Dutch auction share repurchases 5 See also 6 Notes

There is some confusion over terminology: some financial commentators and some third-party auction sites use the term Dutch auction to refer to second-price auctions, which are totally different from Dutch auctions: in a second-price auction, the winner pays the amount bid either by the lowest winning bidder or by the highest losing bidder.

Dutch auctions are a competitive alternative to a traditional auction, in which bids of increasing value are made until a final selling price is reached, because due to ever-decreasing bids buyers must act decisively to name their price or risk losing to a lower offer. [1] A second item auction

A second item auction can be confused with a Dutch auction or a second price auction, especially in finance. In a second item auction, the seller offers more than one identical items for sale, so that there may be more than one winning bidder. Each bidder can bid for all the items or only some of them, and publicly indicates the price that he/she is willing to pay for each item. However, all winning bidders need to pay only the lowest qualifying (successful) bid. If there are more successful bids than items available, priority goes to the bidders who submitted their bids first.

In order to beat a competing bidder, one must bid a higher price per item than that competitor, regardless of the number of items that are being bid for. Here is an example of how this might work:

The seller auctions 5 identical items.

Bidder "A" bids for 2 items at $20 each. Bidder "B" bids for 4 items at $21 each. Bidder "C" bids for 3 items at $18 each.

The outcome of this auction would be:

Bidder "B" wins 4 items at $20 each....

Bidder "A" wins 1 item at $20 each.

The price is $20 because that was the lowest successful bid (hence the second price). Since Bidder "A" was only awarded 1 item, and his original bid was for 2 items, he has the right to refuse the purchase of that partial amount. As a winning bidder, you have the right to refuse paying if you are only awarded less than the number of the items you were bidding on. Public offerings

The United States Department of the Treasury, through the Federal Reserve Bank of New York (FRBNY), raises funds for the U.S. Government using a Dutch auction.[citation needed] The FRBNY interacts with primary dealers, including large banks and broker-dealers who submit bids on behalf of themselves and their clients using the Trading Room Automated Processing System (TRAPS), and are generally told of winning bids within fifteen minutes.

For example, suppose the sponsor of the issuance is seeking to raise $10 billion in ten-year notes with a 5.125% coupon and in aggregate the bids are as follows:

$1.00 billion at 5.115% (highest bid) $2.50 billion at 5.120% $3.50 billion at 5.125% $4.50 billion at 5.130% $3.75 billion at 5.135% $2.75 billion at 5.140% $1.50 billion at 5.145% (lowest bid)

In this example the % at high is 66.66%, meaning only $3 billion of the $4.5 billion at 5.130% will get bonds. Bids will be filled from the lowest yield (highest price) until the entire $10 billion has been raised. This auction will clear at a yield of 5.130%, and all bidders will pay the same amount. In theory, this feature of the Dutch auction format leads to more aggressive bidding as those who in this case bid 5.115% will receive the bonds at the higher yield (lower price) of 5.130%.

A variation on the Dutch auction, OpenIPO, was developed by WR Hambrecht and has been used for 19 IPOs in the US, while three other companies, including Google, used auctions for their IPOs but did not do an OpenIPO. Auctions have been used for hundreds of IPOs in more than two dozen countries, but have not been popular with issuers and thus were replaced by other methods. One of the largest uniform price or "Dutch" auction IPOs was for Singapore Telecom in 1994. The 1994 auction IPO of Japan Tobacco was substantially larger (with proceeds more than double those of Singapore Telecom and triple those of Google), but this auction was discriminatory or pay-what-you-bid, not uniform price or "Dutch". SRECTrade.com uses a two-sided Dutch auction to trade Solar Renewable Energy Credits (SRECs).