What is a "proxy bid"?

A "proxy bid" refers to a bid placed on behalf of a buyer who is unable to attend the auction in person. This concept is important in auction scenarios as it allows potential buyers to participate in the bidding process even if they cannot be physically present. By using a proxy bid, a buyer can indicate the maximum amount they are willing to pay for an item, and the auctioneer places bids on their behalf up to that limit. This ensures that the buyer's interests are still represented in the auction, helping them to secure the item they desire.

Understanding the function of a proxy bid is crucial for both buyers and auctioneers, as it expands participation and can help achieve better selling prices or acquisition values. It emphasizes the inclusivity of the auction process and illustrates the mechanisms that support buyers’ ability to compete even in their absence.