Here 📚 you would learn how responsive bidding works.
General Terms and Definitions in Marketplace Auction
| Term | Meaning |
|---|---|
| Reserve | A minimum price that an NFT seller would be willing to accept from a buyer. |
| Bidding | An offer to set a price tag by a bidder to purchase an NFT. |
| Bidder | An individual who participates in bidding activity to purchase an NFT in the marketplace. |
| Seller | An individual who sells an NFT via an auction in the marketplace. |
| Outbid | The condition in which your bid has been outbid by another bidder. |
| Outbid below the reserve | The condition in which your bid has been outbid since it is below the reserve price. |
| Leading bid | The condition in which you are the current leader of the bid. |
| Tie bid | The condition where two or more bids are equal in the respect of the price. In this situation, the winner will be determined by who placed the bid first. |
| Won | The condition in which you have won this lot. |
| Lost | The condition in which you have lost this lot. |
What is Responsive Bidding?
Responsive bidding is a bidding mechanism in our marketplace where it executes the bids on the lead bidder's behalf. It allows us to place incremental bids on your behalf up to your maximum bid amount automatically if you place a leading maximum bid and another bidder bids against you. It saves your time and eliminates the hassle of placing multiple bids against another bidder in the marketplace auction. It also saves your money since you may win the lot item below the maximum bid that you put if the other bidders' bid is below your maximum bid and above the reserve price.
Responsive Bidding Example - Bids Above the Reserve Price Scenario
The auction puts an item with starting price of 8,000 and a reserve price of 10,000.
- Bidder A enables responsive bidding by placing a maximum bid of 100,000.
- Responsive bidding scheme places a bid at the reserve price of 10,000 on behalf of Bidder A.
- The bid is with Bidder A at the reserve price of 10,000.
- Bidder B places a maximum bid of 20,000.
- Responsive bidding scheme places a bid at 20,000 to try outbid Bidder A's bid.
- Responsive bidding scheme places a bid at 22,000 that outbid Bidder B's bid.
- Bidder A wins the auction as the highest bidder at 22,000 lot item price.
Key note:
A responsive bidding scheme automatically places a bid on the bidder's behalf to try outbid other bidder's bids up to the bidder's maximum bid.
Responsive Bidding Example - Tie Bid Scenario
Info:
In the example below, we eliminate the steps where the responsive bidding scheme tries to outbid the bidder's bid to simplify the example.
The auction puts an item with starting price of 8,000 and a reserve price of 10,000.
- Bidder A places a maximum bid of 100,000.
- Bidder B places a maximum bid of 100,00.
- Both bidder A and B bids rank as the highest bidders.
- Bidder A wins the auction as the first highest bidder.
Key note:
If the tie bid happens, the bidder who puts the bid first will win.
Responsive Bidding Example - Bid Below the Reserve Price Scenario
The auction puts an item with starting price of 8,000 and a reserve price of 10,000.
- Bidder A places a maximum bid of 8,000 at the starting price.
- Responsive bidding scheme places a bid of 8,500 on behalf of Sotheby.
- Bidder B places a maximum bid of 9,500.
- Responsive bidding scheme places a bid of 9,750 on behalf of Sotheby.
- Bidder C places a maximum bid of 10,000.
- Bidder C wins the auction as the highest bidder.
Key note:
If your maximum bid is below the reserve, the responsive bidding scheme may be placed by Sotheby’s on behalf of the seller up to the amount of the reserve.
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