Inc. An important observation must be made before discussing the various auction formats and that is that people generally have one of two motivations for participating in an auction of any type.
All bidders have private valuations and tend to keep that information private.
There would be little point in an auction if the seller knew already how much the highest valuation of an object will be. The second reason for bidding in an auction is to acquire items for resale or commercial use. In this case, an individual bid is predicated not only upon a private valuation reached independently, but also upon an estimate of future valuations of later buyers. In other words, the item is really worth the same to all, but the exact amount is unknown. This is called a common-value assumption, and one example is that of art purchased solely for promotion in some secondary market.