Question

A town selects the construction company that will repair the town roads in the following way. Each construction company that is interested in the job submits its bid in writing to the town hall by a certain day. At the end of that day (and not before), the bids are opened and made public. Whichever company submitted the most competitive offer will the chosen for the job, and they will be paid the amount that they named in their written bid.

What kind of auction is this?

Second Price Sealed Bid Auction

Dutch Auction

First Price Sealed Bid Auction

English auction

Answer 1

THE ABOVE IS A FIRST PRICE SEALED BID AUCTION

(IN A FIRST PRICE SEALED BID,EVERY BIDDER PRESENTS A BID WHICH IS HIDDEN FROM THE OTHER BIDDERS,AND THE HIGHEST BID THUS WINS THE AUCTION.THERE ARE TWO IMPORTANT ASPECTS OF SUCH BID,ONE BEING THE PARTICIPATION PHASE WHERE ALL THE BIDS ARE PRESENTED AND SECOND BEING THE RESOLUTION PHASE IN WHICH ALL THE BIDS ARE OPENED AND A WINNER IS DECLARED WHO PAYS THE PRICE QUOTED IN THE BID

IN THE ABOVE SITUATION,EACH CONSTRUCTION COMPANY SUBMITS THE BID TO THE TOWN HALL DURING THE PARTICIPATION PHASE,AND DURING THE RESOLUTION PHASE THE HIGHEST BIDDER IS DECLARED)