Moving on to the newest version of the Facebook API, the naming and some of the inner workings of bidding has changed.
There used to be 3 main options: Automatic Bidding, Manual Bidding and Average bidding.
Automatic Bidding has evolved into an option called "Lowest Cost". It will, as the name implies, aim for the lowest bids possible, but it doesn't have a cap on your bids.
Manual Bidding is now called "Lowest Cost with Bid Cap". You will need to input a maximum amount for your bids, and facebook will try to get as cheap a bid as they can, without going over the cap you set.
Average Bidding is now known as "Target Cost". It is only available for specific Campaign Objectives (Conversion, Mobile App Install, Catalog Sales and Lead generation) - If you don't select these, the option will not be displayed.
Once you have set your target, Facebook will try and get, on average, bids around your target.