An auction is a mechanism or process used to buy and sell goods, services, or assets through competitive bidding. In an auction, multiple participants, often called bidders or buyers, compete to acquire the item or service being auctioned by placing bids. Auctions can be categorized based on the information available to bidders, which refers to the level of information participants have about the item being auctioned, the bids of other participants, and the rules of the auction. In private-value auctions, each bidder has private information on their own valuation of the item. Bidders may have different valuations for the same item based on their unique needs or preferences. Sealed-bid auctions are often used in private-value settings.