Created by a Canadian Nobel laureate, a Vickrey auction is one where bidders submit secret written bids and in which the highest bidder wins, but the price paid is that of what?
Vickrey auction bids of all the other actual winning bidders. A different kind of generalization is to set a reservation price - a minimum price below which the item is not sold at all. In some cases, setting a reservation price can substantially increase the revenue of the auctioneer. This is an example of Bayesian-optimal mechanism design. Vickrey auction A Vickrey auction is a type of sealed-bid auction. Bidders submit written bids without knowing the bid of the other people in the auction. The highest bidder wins but the price paid is the second-highest bid. This type of auction is strategically similar
Vickrey–Clarke–Groves auction Vickrey–Clarke–Groves auction A Vickrey–Clarke–Groves (VCG) auction is a type of sealed-bid auction of multiple items. Bidders submit bids that report their valuations for the items, without knowing the bids of the other bidders. The auction system assigns the items in a socially optimal manner: it charges each individual the harm they cause to other bidders. It gives bidders an incentive to bid their true valuations, by ensuring that the optimal strategy for each bidder is to bid their true valuations of the items. It is a generalization of a Vickrey auction for multiple items. The auction is named after William