Penny auctions are online auction sites where users place bids at a time. As more people place bids, the price of the item increases. The winner of the auction is the last person to place a bid and pays the price that was reached during the bidding process. In most cases, these auctions require users to purchase "bidding credits" in order to participate. Most penny auctions also add an additional cost to the winning bid, which can be either a flat fee or a percentage of the total purchase price.
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