In a sealed high-bid auction, each bidder submits a single sealed bid. The high bidder wins the auction and pays his own bid. In this exercise, we put students in a competitive sealed-bid auction for the purposes of teaching them to bid optimally.
Students play against a computer that is bidding optimally.
An optimal bid balances these two effects. For example, a bidder does not want to raise his bid all the way up to his value because that would guarantee zero profits. Students are shown a graph of the two distributions and asked to submit bids at three different values. The program computes expected profits at each of the three values. Otherwise, students are asked to resubmit bids.