What type of auction is conducted with no reserve?

An auction conducted with no reserve is termed an absolute auction. In this type of auction, there is no minimum price that must be met for the item to be sold. This means that the highest bid at the conclusion of the auction will win the item, regardless of the bid amount. The absence of a reserve price can encourage more competitive bidding, as participants know that the item will be sold to the highest bidder without the risk of it being withdrawn or not sold if the bidding does not reach a predetermined threshold.

In contrast, other types of auctions, such as minimum auctions, include conditions that require bids to meet a certain minimum before the item can be sold. Sealed bid auctions involve bidders submitting their bids confidentially, which is different from the open bidding process seen in an absolute auction. Open auctions allow bidders to see each other's bids and adjust their offers accordingly, but they might include a reserve price, which isn't the case in an absolute auction. Thus, the defining characteristic of an absolute auction is the absence of this reserve, resulting in straightforward and often highly competitive bidding.