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.
Cost Cap is a new bidding strategy that allows you to provide Facebook with the cost of the results you care about. This enables FB to deliver the maximum number of conversions as that they can. The cost you provide when you are setting this up is an average amount and FB will try to stay under by going after the lowest cost events available.
There is a complete bidding guide provided by Facebook that you can check here in case you get lost.