What is the definition of "competitive bidding"?

The definition of "competitive bidding" is accurately represented as a process where multiple bidders place increasing bids until a winner is determined. This process is fundamental to the auction method, as it entails bidders actively competing against one another, often resulting in escalating offers on an item. The competitive nature of this bidding mechanism tends to drive prices higher as each participant tries to outbid the others, ultimately leading to a sale at a price that reflects the value perceived by the bidders.

In an auction environment, the essence of competitive bidding creates a dynamic atmosphere where the highest bidder emerges as the winner, bringing a transparent and engaging method to facilitate the sale of goods. It's important to understand this context, as it differentiates competitive bidding from other auction strategies or definitions, which may involve fixed pricing, starting bids, or guidelines that do not capture the essence of an active and continually evolving bidding process among participants.