A sealed-bid auction is a type of auction where all bidders submit their bids privately and simultaneously. Each bidder writes down their offer on a piece of paper and places it in a sealed envelope. Once all bids are submitted, the envelopes are opened, and the highest bidder wins the item or service being auctioned. In this auction format, bidders do not know the offers made by others, which can lead to strategic bidding. Sealed-bid auctions are commonly used for government contracts and real estate transactions, ensuring confidentiality and encouraging competitive bidding among participants.