What type of auction guarantees the highest sale price for items?

The correct type of auction that guarantees the highest sale price for items is a reserve auction. In a reserve auction, the seller sets a minimum price, known as the reserve price, below which the item will not be sold. This mechanism encourages bidders to compete and potentially drive the final sale price higher, as bidders are aware that their bids must exceed the reserve price to secure the item.

This auction format protects the seller by ensuring that if the bidding does not reach their minimum acceptable price, they are not obligated to sell the item. Consequently, this can lead to higher final sale prices since bidders are motivated to bid more aggressively to meet or exceed that reserve price.

Other auction types do not inherently provide this level of price protection for the seller: absolute auctions sell items to the highest bidder regardless of the final price, online auctions rely on the openness of bidding without minimums, and sealed-bid auctions might not yield as competitive pricing due to the lack of real-time bidding dynamics. Each of these formats can result in lower final sale prices under certain circumstances compared to a reserve auction’s structured approach.