Abstract
This essay simply explores the complex world of auctions and how they basically work. Start with a brief summary of auction’s history, from the Babylonian era to the present, the essay shows how auctions have evolved over the history. Then, four typical auctions are introduced by listing their rules and how they are played. Most importantly, at the main body, the essay revealed various factors that have impact on how an auction is played, such as sunk cost fallacy, information dynamics, auction rules, and the existence of bidders with distinct motivations. In addition, Candle and dollar auctions are used to show the impact of information and rules on an auction respectively. In the end, the essay argues that auctions are complicated rather than just contests for riches and emphasizes the significance of comprehending these factors. The essay aims to inform people to make wise decisions in both auctions and everyday life.