first-price sealed-bid auction

A first-price sealed-bid auction is a type of auction where each bidder submits a confidential bid without seeing others' offers. Once all bids are received, they are opened simultaneously, and the highest bid wins. The winner pays exactly the amount they bid. This format encourages bidders to carefully consider their true valuation of the item while strategizing how much less than their maximum they should bid to maximize their chances of winning while paying less. It’s commonly used in procurement, art sales, and some government contracts.