The Highest Bidder Does Not Always Pay the Highest Price
A bidder offers a price at auction. In some auction formats the winner pays what the second-highest bidder offered.
A bidder is someone offering a price at an auction or tender. Not every auction works the way films suggest: in a second-price or Vickrey auction the highest bidder wins but pays the second-highest bid. The design encourages honest bidding, since overbidding gains nothing, and variants of it underpin much online advertising.
- Someone making a bid. *The winning bidder.*
- A tendering party. *Three bidders shortlisted.*
- Bid (verb) — to offer a price. *He bid twice.*
Word forms
| Form | Word | Example |
|---|---|---|
| Noun | bidder | A rival bidder. |
| Plural | bidders | Several bidders. |
| Verb | bid | Bid for the lot. |
| Past | bid | He bid ten pounds. |
| Noun | bid | A sealed bid. |
How it is used in a sentence
- Sold to the highest bidder.Auction formula.
- Bidders submitted sealed offers.Tender process.
- She bid on three lots.The past tense of bid is bid.
Auction formats
- English — open ascending bids, the familiar kind
- Dutch — the price falls until someone accepts
- Sealed-bid — everyone submits once, privately
- Vickrey — sealed-bid, and the winner pays the second-highest price
- Reserve — the minimum the seller will accept
From *bid*, which merges two Old English verbs: *biddan*, to ask, and *beodan*, to offer. That is why bid means both invite and offer a price.
What is a Dutch auction?
One where the price starts high and falls until a bidder accepts. It is used for flowers in the Netherlands, which is where the name comes from.
Bid, bade or bidded?
For offering a price, the past tense is bid. Bade belongs to the other sense: he bade her farewell.