Market and Auction mechanisms

Market mechanisms refer to the processes through which buyers and sellers interact to determine prices and allocate resources. In a market, prices fluctuate based on supply and demand—when demand exceeds supply, prices rise, and vice versa. Auction mechanisms are a specific type of market where items are sold to the highest bidder. Participants place bids, and the item goes to the highest bidder at the end of the bidding period. Both mechanisms rely on competition and information flow, helping ensure that goods and services reach those who value them the most.