In which type of auction are the terms set by the auctioneer?

In an absolute auction, the auctioneer sets the terms, meaning there are no minimum bids or reserves. This type of auction is characterized by the seller committing to sell the item, regardless of the final bid amount. The absence of a reserve price ensures that the item will be sold to the highest bidder, encouraging competitive bidding and often leading to potential bargains for buyers. The auctioneer's determination of terms—such as bidding increments and any specific rules—creates a transparent and straightforward buying process.

Public auctions, reserve auctions, and online auctions each have distinct features that differentiate them from absolute auctions. In public auctions, while the auctioneer hosts the event, there may still be a reserve price set by the seller. In reserve auctions, if the bidding doesn't meet the reserve price, the item may not be sold at all, contrasting with the commitment found in absolute auctions. Online auctions may have varied formats and terms set based on the platform; they are not necessarily absolute in nature. Thus, the defining characteristic of an absolute auction is the auctioneer’s role in establishing the terms that guarantee the sale of the item to the highest bidder.