Vickrey Pricing Model

The Vickrey pricing model is a type of auction called a second-price sealed-bid auction. Bidders submit their bids secretly, and the highest bidder wins. However, instead of paying their bid amount, they pay the second-highest bid. This encourages bidders to bid their true value, as bidding higher or lower doesn't influence their final price, promoting honest bidding behavior. It’s useful for allocating items efficiently and fairly, especially when bidders have private valuations.