What is Dutch Auction?
An auction format where the price starts high and decreases until a buyer accepts the price.
Definition
A Dutch auction runs ascending from a low starting price in a procurement context: the price rises in increments until a supplier accepts, and the first acceptance ends the event. It is the mirror of the descending formats and rewards speed of decision rather than iterative improvement.
How it works in practice
A buyer needs an urgent replacement part. The auction opens below any plausible market price and steps up; the first supplier willing to commit at the displayed level takes the order immediately.
Why it matters
Because the first acceptance closes the event, it favours urgency and decisiveness. It is used far less often than reverse English or Japanese formats and suits time-critical, single-award situations.
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