What characterizes a "no reserve" auction?

In a "no reserve" auction, items are sold regardless of the final bid amount. This means that there is no minimum price that needs to be reached for the item to be sold. The seller agrees to sell the item to the highest bidder, even if that highest bid is lower than the seller’s anticipated value or expectations. This creates a more competitive environment for bidders, as they know that any bid could result in winning the item, encouraging participation from potential buyers who might otherwise hold back.

In contrast, auctions that feature reserve prices require that a minimum bid be met for the item to be sold, which can discourage bidders if they feel the starting price is too high. The other options describe characteristics associated with different types of auctions. For instance, bidding with a minimum bid or allowing sellers to withdraw items introduces a different dynamic, emphasizing seller control rather than the open nature of a no reserve auction.