Reverse Auction: A type of auction process in which buyers compete with each other to obtain goods or services for the lowest price. The reverse auction begins when a buyer invites sellers to bid on an item or service, and then gradually reduces the amount they’re willing to pay while the sellers adjust their bids accordingly. This format allows buyers to secure goods and services at the best possible price while sellers aim to maximize their profits. As such, reverse auctions provide a mutually beneficial environment for both parties and are becoming increasingly popular in the world of financial investment.