Nothing complicated in understanding what goes on.
The purpose is to introduce the property to the maximum number of people at the same time with the expectation that the buyers will compete with one another and so drive the price up. With property you can do this with a extensively promoted auction which can cost a large amount of money.
So you need the hopeful, the neighbors and also the expectant buyers to turn up, having a crowd is essential to produce a good extravaganza
The participants are put under very high degree of pressure with the agent working hard to increase the buyers price and to decrease the sellers price so as to get a commission, with the threat that if they don't agree then all the money for the advertising promotion is wasted and the two parties will lose their chance to have a result
It is arguable that the same amount of effort and money put into a private sale could produce a better price
