Second-price (Vickrey) auction
Host this auctionBidders submit private offers. The highest bidder wins but pays the second-highest offer, or the seller’s minimum price if that is higher.
Make a private bid
The ticket is worth $100 to you. Your offer is filled in below; you can change it before submitting.
How much should you bid?
If your limit is $100 and the highest competing offer is $80, bidding $100 wins the item for $80, provided the seller’s minimum is no higher. A bid of $90 would still mean paying $80. A bid below $80 would lose an item you were happy to buy at that price.
That is why bidding less than your limit does not help you get a better deal. Bidding above your limit can make you pay too much, because another bidder’s offer may then set a price you cannot afford or do not want to pay. For a single item whose value you know, bid the most you would willingly pay.
False bids
A dishonest seller could add a fake bid just below the winning offer, raising the winner’s price. Because competing bids are private, bidders cannot check them during the auction. They need to trust that the seller will calculate the price from genuine bids.
Host this auction
Set the minimum price before bidding opens. If only one bidder meets it, that bidder pays the minimum. Offers stay private and can be replaced until the deadline; the result shows the winning offer and the price owed.