Candle auction

Candle auction

’’’Candle auction’’’ was used from about 1490 to 1893 and is occasionally used even today for ceremonial purposes. After 1674 the Candle auction was gradually replaced by the English auction in most cases. Both types of auction are ascending open auctions.

The auctioneer will light a one-inch tallow candle on top of his desk and accept bids only as long as the candle is burning (15 to 20 minutes). In Samuel Pepys´ (1633-1703) famous diary he relates two occasions when the British Admiralty (his employer) sold surplus ships “by an inch of candle”. (On 1660-11-06 and on 1662-09-03).

It is the unpredictability of the exact moment, when no more bids will be accepted, that is used again in the age of the Internet. In these “Candle auctions without a candle” a computer will randomly select the exact moment when the auction will end. The idea is to prevent bidders from waiting until the very last second before submitting their final bids. Instead the bids will be submitted a bit earlier, well inside the “safe period”. Everything can be computerised and the auction conducted without a live auctioneer.

For other types of auctions see Auction.

Journal of Economic Literature, JEL, Classification System: D4 – Market Structure and Pricing. D44 – Auctions.

Further reading

Milgrom, Paul (2004). Putting Auction Theory to Work, 384 pp. Cambridge University Press. ISBN 0-521-53672-3.

Categories: Auctioneering.