How to add an auction to your event

How to add an auction to your event

What is the issue you're facing?

I would like to add an auction to my event. How can I do this?

Solution

In order to add an auction to your event you need to:
  1. Create your event as normal
  2. Ensure that the 'Do you want to have an Online Auction?' option is selected

  1. You'll now need to set the default currency for the event and choose whether or not you wish to set this up to allow multiple currencies. See here for allowing multiple currencies. 

  1. You then need to select the date/time at which you would like the auction to start using the Auction Start Time & Date section


  1. You now need to choose which direction you would like the auction to run in using the Bid Direction drop down
    2. A Forward Event is one where the bidding goes UP in value, whereas a Reverse Event is one where bidding goes DOWN in value
    3. The suitability of a Forward Event is when you wish to sell a service, item or goods to a market of buyers, e.g. a house or scrap metal.
    4. The suitability of a Reverse Event is when you are looking to purchase a service, item or goods from a market of suppliers, e.g. a year's worth of corporate stationery.

  1. You then need to choose if you would like the auction to be a Ranked, Open or Japanese auction using the drop down in the Event Type section

    1. Ranked Auction: participants see their position per Lot relative to the other participants. Generally this is the most popular auction type as it works for the majority of situations.
      1. Pros: it promotes a very close auction with a number of participants on a similar price level; it gives clear feedback to the participants; only the leading participant knows what the final price is.
      2. Cons: a participant in second or third position, for example, may be content with their rank and may cease to compete for the lead unless you have sent a clear message beforehand that the top ranked participant shall have first refusal.
    1. Open Auction: participants see the Lead Bid per Lot and can only submit a bid that beats it.
      1. Pros: it can quickly settle the negotiation, as participants can only bid for the lead; it is very effective if you do not mind who wins the Event.
      2. Cons: there can be large price gaps between each participant, leaving you with less choice than a Ranked Auction. A participant may have been able to offer a slightly more improved bid, but couldn't as they could only bid against the leading bid. This particularly comes into play if there are multiple Lots and you wish to make the award decision after the Auction based on grouping the Lots together, as you may find your choice is constrained.
    1. Japanese Auction: a Bid Level, which begins at the Qualification Price, per Lot is shown to the participants. The participant must either Accept or Decline the Bid Level within a set time period, e.g. two minutes. Once accepted and the time expires, the price drops (if reverse auction) or increases (if forward auction) by a specified amount and the participant must repeat the process. It continues in this fashion until the participant declines the Bid Level or is timed out.
      1. Pros: you can run this auction type with a minimum of one participant, since participants have no idea who they are competing against. It is also effective when you think the leading participant still has margin to play with yet is unlikely to be challenged in a conventional auction.
      2. Cons: is it least popular with participants as they receive very little market feedback, as in essence they could be competing against themselves.
  1. You now need to select the minimum duration of the auction in the Minimum duration section

    1. Once the Online Negotiation Event is underway this is the duration that you would like the Event to last as a minimum. If you choose to have the Dynamic Close option then the duration may extend beyond this minimum, depending on the whether the Dynamic Close is triggered.
    1. We recommend a standard Minimum Event Duration of 30 minutes, as this generally gives all participants enough time. You may wish to run a longer Event if there are many Lots with a degree of complexity, or if you have participants that cover multiple time zones.
  1. You now need to select if you would like to have a dynamic close period on your auction, and if so how long it should be for. You can do this by selecting none or how long in the drop down. 

    1. The Dynamic Close feature automatically resets the remaining time in the Online Negotiation Event if a bid is placed in the final number of minutes that you specify.
    1. For example, if you specify Dynamic Close for the last 5 minutes, then if a bid is placed within the final 5 minutes, the countdown clock resets to 5 minutes remaining. The Dynamic Close will continue to reset the clock until no further bids are placed.
    1. This feature is recommended for almost all Events that occur. The reason is that participants almost always require some breathing time to revise their offer. It also prevents sniping, which is the placement of a leading bid in the final few seconds. Sniping will only upset other participants as they may wish to respond but without Dynamic Close would be unable to do so.
  1. You then need to setup both the minimum and maximum bid change. You can do this by setting the relevant percentages in each text box.

    1. Minimum Bid Change
      1. This is the smallest percentage price change that a participant can submit per bid in the Online Negotiation Event. It is used to keep the bids moving along at a steady pace.
      2. For example if the latest bid by the participant is £10 and the Minimum Bid Change is 10% then the next bid submitted by that participant must differ by at least £1.
    1. Maximum Bid Change
      1. This is the largest percentage price change that a participant can submit per bid in the Online Negotiation Event. It is used to prevent mistakes and to encourage competition by keeping the participant bids closer together.
      2. For example if the latest bid by the participant is £10 and the Maximum Bid Change is 50% then the next bid change submitted by that participant cannot exceed £5.
  1. Finally you need to decide on the Tied Bid options in this drop down

    1. This option is used to create different outcomes for the rank if two or more participants submit the same bid.
      1. Equal worst position - The participants will be placed into the equal worst position on submission of the same bid. For example, if the two leading participants both submit the same bid, they will each be given a position of 2, so they will both know that they need to improve.
      2. Equal best position - The participants will be placed into the equal best position on submission of the same bid. For example, if the two leading participants both submit the same bid, they will each be given a position of 1. This is technically correct although it might not encourage further bidding.
      3. ​Separated by timestamp - The participants will be given different ranks on submission of the same bid based on the time their bid was received by the Market Dojo server. For example if Participant A submits a leading bid at 10:40 am and Participant B submits the same leading bid at 10:41 am then Participant A will be given the rank of 1 and Participant B the rank of 2.


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