In the auction world, Absolute means that all of the items offered for sale are going to get sold regardless of how much they get bid up to.
Plainly said, absolute auctions are far and away the most fun type of auction you can be a part of, the chance for scoring a great deal is greatly augmented when you know that everything needs to be sold, it just heightens the overall experience.
Although, sometimes it is the Auctioneers responsibility to institute the use of Reserves.
Reserves are a method of protecting the consignor's liability regarding the selling price of their assets. If used, the reserve price is agreed upon between the consignor and the auctioneer ahead of the event. Reserves are especially important if there is a mismatch between the types of items regularly sold at a specific auction house and this particular item. A genuine Picasso is most likely going to get dramatically undersold at a local farm auction, conversely, your $20,000 John Deere tractor is not going to do too well down on 5th Ave. This is definitely an acceptable time for the Auctioneer to implement a reserve price, quite frankly, it should be their obligation.
Reserves may also be used when the buyer has a specific value in mind, but it is questionable if the market is willing to match that expectation.
At least here in PA (Pittsburgh area), all auctions should be expected to have reserves (whether explicitly stated or not) unless they are specifically advertised as "Absolute". If the term "Absolute" is found in any advertising, there should not be any reserves in place.
Reserves may be encountered in several different forms per the discretion of the auctioneer. Sometimes the auctioneer may announce that some items have reserves in place, they may let the audience bid freely and then announce to the crowd that the "reserve has been met", or if bidding does not go high enough, they may say something like "item is passed".
At our auction company, Bid On Estates, we rarely implement any reserves, we just don't like them. Although, from time to time, we may find them necessary to use. In these rare cases, instead of a hidden reserve, we will just clearly state that the opening bid is "x" amount. We believe this is the easiest and most transparent method to handling these special scenarios.
We strongly believe in the power of the free market. Our approach to conducting auctions relies upon the broad reach of the internet for all of our bids, so we are not limited to receive bids solely from the people that happen to be in the room on that particular day.
Feel free to comment, would love to hear your thoughts.