Auction Types

Sealed bid auction

This describes auctions where bidders place bids ‘secretly’, and are unaware of what others have bid in the auction. Thus bidders do not engage in competition with other bidders. They instead tend to make bids based upon what they consider the item’s market value to be. Bids are only revealed at the end of the auction, and the bidder who placed the highest bid wins. Vickrey auctions are a well-known type of sealed bid auction.

Open bid auction

This is an auction where bidding is public, and every bidder has full knowledge of the value of all the other bids. It is the opposite of a sealed bid auction.