The most common type of auction, the English auction, is often used to sell art, wine, antiques, and other goods.
The auction creator sets a reserve price (this can be zero), which is the lowest price the item can be sold for.
Once a bid for the reserve price has been made, the auctioneer solicits further bids, usually raising the price by a predetermined bid increment. This continues until no one is willing to increase the bid any further, at which point the auction is closed and the final bidder receives the item at his bid price.
Because the winner pays his bid, this type of auction is known as a first-price auction.