What is a 'Sealed-Bid Auction'

A sealed-bid auction is a type of auction process in which all bidders simultaneously submit sealed bids to the auctioneer, so that no bidder knows how much the other auction participants have bid. The highest bidder is usually declared the winner of the bidding process.

BREAKING DOWN 'Sealed-Bid Auction'

In a sealed-bid auction, bidders can only submit one bid and therefore cannot adjust their bids based on competing bids. This sets it apart from the more common English auction, also known as the open ascending price auction, where participants can make multiple bids and bid against each other. A sealed-bid auction process may also not be as transparent as an English auction. Sealed-bid auctions are generally used in tendering for government contracts.

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