| Website | sealedsecond.com |
| Category | eCommerce |
| Employees | |
| Founded | 2009 |
| Description | Second-Best Price Auctions |
SealedSecondâ„¢ is an internet auction platform that aligns the interests of Buyers and Sellers through an innovative Sealed Bid, Second-Best Price auction format. The SealedSecondâ„¢ auction format reduces risks, such as the Winner’s Curse, Bid Shading and Collusion, that are inherent in some other auction formats.
In a SealedSecond™ auction, Bidders submit Sealed Bids for an Auctioned Item of interest. The Sealed Bids are not revealed to the Seller or to other Bidders for the duration of the auction. At the conclusion of a SealedSecond™ auction, if the Auctioned Item has received multiple Sealed Bids at least equal to the auction’s Reserve Price, the Highest Bidder wins the SealedSecond™ auction but only pays the Second-Best Price (the SealedSecond™ Price), which is the second highest Sealed Bid submitted during the auction.
For Bidders, the Highest Bidder’s payment of the Second-Best Price, rather than his or her highest Sealed Bid, advantageously diminishes the risk of overpayment. Overpayment is commonly known as the Winner’s Curse, a problem regularly encountered with some other auction formats.
For Sellers, the SealedSecond™ auction format advantageously diminishes the risk of Bidders engaging in Bid Shading, or underbidding - or even deciding not to bid at all - as the Bidders seek to avoid the dreaded Winner’s Curse. The SealedSecond™ auction format also reduces a risk of side agreements, or Collusion, among Bidders, which can lead to improperly low winning bids for Auctioned Items.
By reducing the Bidders’ risk of overpayment via Second-Best Pricing, while also diminishing the risk of Bidder Collusion through Sealed Bidding, SealedSecond™ Auctions motivate Bidders to confidently bid their full estimates of an Auctioned Item’s true worth, thereby providing Sellers with full, Fair Value for the Auctioned Item.
