An auction is the process of buying and selling things by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory, an auction is a method for determining the value of a commodity that has an undetermined or variable price. Auctions can be with reserve or minimum, or without minimums, or absolute or no reserve. In reserve auctions, there is a minimum bid or reserve price; if the bidding does not reach the minimum, there is no sale (but the person who puts the item up for auction may still owe a fee to the auctioneer or auction company). In absolute or no reserve auctions, the sale is guaranteed, with only the price left to be determined. In the context of auctions, a bid is an offered price.

Auctions are publicly seen in several contexts and almost anything can be sold at auction. Some typical auction arenas include the following:

• the antique business, where besides being an opportunity for trade they also serve as social occasions and entertainment
• in the sale of collectibles such as stamps, coins, classic cars (by Kruse International for example), fine art, and luxury real estate
• in the sale of all types of real property including residential and commercial real estate, farms, vacant lots and land
• for the sale of second-hand goods of all kinds, particularly house clearances and online auctions
• in commodities auctions, like the fish wholesale auctions
• in thoroughbred horseracing, where yearling horses are commonly auctioned off; and
• in legal contexts where forced auctions occur, as when one's farm or house is sold at auction on the courthouse steps.

Although less publicly visible, the most economically important auctions are the commodities auctions in which the bidders are businesses even up to corporation level. Examples of this type of auction include:

• sales of businesses
• spectrum auctions, in which companies purchase licenses to use portions of the electromagnetic spectrum for communications (for cell phone networks, for example)
• timber auctions, in which companies purchase licenses to log on government land
• electricity auctions, in which large-scale generators and consumers of electricity bid on generating contracts
• environmental auctions, in which companies bid for licenses to avoid being required to decrease their environmental impact
• debt auctions, in which governments sell debt instruments, such as bonds, to investors. The auction is usually sealed and the uniform price paid by the investors is typically the best non-winning bid. In most cases, investors can also place so called non-competitive bids which indicates an interest to purchase the debt instrument at the resulting price, whatever it may be.