A sealed bid auction is a type of auction where all bidders submit their bids privately and simultaneously. Each participant writes down their offer for the item being sold, and these bids are not revealed until the auction ends. This format encourages bidders to make their best offer without knowing what others are willing to pay. Once all bids are submitted, the auctioneer opens them and awards the item to the highest bidder. This method is often used for selling real estate, government contracts, or other valuable items, as it helps maintain confidentiality and can lead to competitive bidding among participants.