[logifail]

> If the bids were open, the competing parties could simply go $1 above the highest offer [..]

Isn't that what you want to happen?

All the auctions I've ever participated have repeated this very process until none of the buyers are prepared to raise their bid, at which point it appears the seller has got the highest price anyone will offer.

What am I missing?

[michaelt]

In theory, a Second-price sealed-bid auction will produce the same price as an Open ascending-bid auction. Every bidder will offer the true value of the item to them, and the item will go to the highest bidder at the second-highest price.

But some people might think, due to human nature, that one auction or the other gets higher prices. Maybe an open bid auction gets lower bids, because interested people start lower knowing they can bid again, then back out when they see there's a lot of competition. Maybe sealed-bid auctions work better for large organisations, as getting board approval and CFO sign-off on a multi-million-dollar expenditure takes a few days. Or maybe an open bid auction gets bidders het up and excited because they're in second place and surely no matter what you've bid, you'd always bid 5% more to win - right?

None of which is backed by theory, but if it feels true to the judge - who's to say?

IMHO the main value of buying infowars, to The Onion, was the publicity and headlines. Those are harvested now. If the auction was repeated I can't imagine The Onion upping their bid.

[pyrale]

> who's to say?

Surely we could find a professional, whose job it is to liquidate assets after a court decision, that the judge would trust?

If this existed, it should have a name that emphasizes the trust aspect.

[CDRdude]

The article suggests that this is is a first price sealed bid auction instead of a second price sealed bid auction. Skipping over the more complex nature of the Onion bid, the linked articles states "The total value of The Onion’s bid was $7 million" and "First United American Companies had a higher bid, offering $3.5 million in cash".

[a4isms]

In some parts of the world, they auction houses in this exact manner. You show up, post a very large amount of money to prove you're serious, then everyone bids in person like an art auction.

Here in Canada, when the market is hot there are lots of auctions withe multiple buyers competing for a house. In my market (Southern Ontario), it is almost always a sealed bid situation, and winning buyers often outbid their rivals by tens of thousands of dollars.

The agents around here are fond of a process engineered to maximize the bids: If there are multiple bids that are all reasonable, they will tell the lowballs to go home, while telling those remaining how many bids are in, and offering everyone a chance to "sweeten up" before a final decision is made.

I personally would never buy a home through such a process, which tells you that I absolutely would love to sell my home in exactly this fashion should the market be hot whenever that happens.

Now that being said, I cannot say for certain whether the frenzy of shouting bids while staring your opponents in the eye will produce more money or the sealed bids will produce more money.

[uberman]

sealed bidding entices bidders who really want something to overbid to ensure they win. It is a common strategy to maximize offers