What characterizes an 'open outcry' auction?

An 'open outcry' auction is characterized by bidders verbally announcing their bids to each other in a dynamic and competitive atmosphere. This traditional method fosters interaction among participants, as bidders respond to one another's offers in real time, often raising their bids vocally and engaging in a spirited back-and-forth that can drive up the final price of the item being auctioned. The audible nature of these bids enhances transparency, as all participants can hear the bids being placed, offering them a clear understanding of the current price level and allowing for immediate reactions.

The other options describe auction processes that do not align with the traditional open outcry format. For instance, anonymous paper bids do not facilitate the direct competition or real-time engagement typical in open outcry situations, and a scenario where only the auctioneer speaks would not create the lively atmosphere that defines this auction type. Lastly, the requirement for prior approval of bids by the auctioneer is not a characteristic feature of open outcry; rather, in these auctions, once a bid is articulated, it typically stands unless retracted.