Auctions are a [[dynamic pricing]] tactic in which the final sale price of an item or service is established through a competitive bidding process. Auctions allow potential buyers to actively participate in determining the value of an item by placing incremental bids against one another. This method is similar to [[real-time market pricing]], leading to prices that reflect the market demand and buyer interest, often resulting in higher revenues for sellers when there is significant competition. Auctions can take various forms, including live, online, and silent formats, each offering unique advantages and attracting different types of participants. They are widely used across numerous sectors, from art and antiques to real estate and government contracts, showcasing their versatility as a pricing mechanism.