In my experience academic auction theory is almost irrelevant when buying a house. I do have a close friend who designs huge market trading systems, so I will talk to them and validate my opinion.
In practice, house transactions appear to be driven by irrational or ignorant participants (vendors, other bidders, agents, banks, insurance companies) and sometimes understanding those factors can give you a significant edge in the market. Also every house transaction has different context, risks and itβs own unique factors, so it is very difficult to make generalised rules.
Disclaimer: I know little about auction theory, and I have only spent a few years trying to understand one tiny property market, so my opinions are not that valuable.
Right; so wouldn't those be the causes of whatever (if anything) is wrong, rather than bids being sealed? Give some irrational bidders open bids and they will have a bidding war instead.
> The link above assumes the highest bidder knows the price of the underbidder, which is silly
The first price auction and second price auction types are understood to be sealed bid. The English auction is open: bidders can bid more than once and see other bids.
In the second price auction, the underbidder's price is revealed when the auction ends, not during the bidding; the highest bidder pays that price.