A quick definition of knock-out auction:

A knock-out auction is when some people agree not to bid against each other before the auction starts. This is not allowed in some places because it can be unfair. An auction is when people bid on something and the person who offers the most money gets to buy it. There are different types of auctions, like ones where there is no minimum price and ones where there is a minimum price. In a Dutch auction, the price starts high and goes down until someone buys it.