An auction in which the highest bidder wins but pays only the second-highest bid. This variation over the normal bidding procedure is supposed to encourage bidders to bid the largest amount they are willing to pay.
Vickrey Auction
See also
AuctionExplore with Wolfram|Alpha
References
Vickrey, W. "Counterspeculation, Auctions, and Competitive Sealed Tenders." J. Finance 16, 8-27, 1961. Reprinted in The Economics of Information, Vol. 1 (Ed. D. K. Levine and S. A. Lippman). Aldershot, Hants, England: Elgar, pp. 8-44, 1995.Referenced on Wolfram|Alpha
Vickrey AuctionCite this as:
Weisstein, Eric W. "Vickrey Auction." From MathWorld--A Wolfram Web Resource. https://mathworld.wolfram.com/VickreyAuction.html