Sealed-Bid Auction

AAA

DEFINITION of 'Sealed-Bid Auction'

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Absolute Auction

    A type of auction where the sale is awarded to the highest bidder. ...
  2. Price Band

    A value-setting method in which a seller indicates an upper and ...
  3. Counterbid

    A purchase offer made in counter to the offer of another potential ...
  4. Bidding War

    A situation where two or more buyers are so interested in an ...
  5. Auction

    A system where potential buyers place competitive bids on assets ...
  6. Dutch Auction

    1. A public offering auction structure in which the price of ...
Related Articles
  1. The History Of The T-Bill Auction
    Bonds & Fixed Income

    The History Of The T-Bill Auction

  2. What does it mean when my broker says ...
    Investing

    What does it mean when my broker says ...

  3. Auction Rate Securities: Bidding On ...
    Bonds & Fixed Income

    Auction Rate Securities: Bidding On ...

  4. The Easy Way To Measure Bitcoin's Fair ...
    Investing Basics

    The Easy Way To Measure Bitcoin's Fair ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center