Yeas ago I worked for a major oil company and was involved in offshore (Gulf of Mexico) lease auctions. When I was starting out an older guy took me aside and explained auctions this way.

Imagine you have five bidders, people who know their stuff. Sixty percent of the time they nail the value, 20% of the time they estimate low by 20%, and 20% of the time they bid high by 20%. Thus the winning bid is always by a knowledgeable buyer who has an off day on the high end of the scale. An active auction works for the seller.