“It seemed doomed almost from the moment they decided to go to a sealed bid,” Judge Lopez said. “Nobody knows what anybody else is bidding,” he added.
A first price sealed bid auction is a perfectly common type of auction.
It’s functionally equivalent to an auction where you know the value of a thing (like we do a business being liquidated because the owner is in extremely deep unrelated legal debt), and the auctioneer starts by asking for the face value and then progressively lowers the ask until the first person accepts the price.
Instead of trying to get the lowest price possible, people are incentivised to start with their best offer for what they actually think the thing is valued. Allowing follow-up bids encourages people to low-ball and work their way up, which can reduce the price the seller gets for the item.
No idea, and not entirely sure why it matters. If your goal is to sell an asset and maximize proceeds, it’s a known and unsurprising strategy, particularly since it gives higher returns when there are few bidders.
