In this auction, the winner never has to pay their own bid
In a Vickrey auction, bidders submit sealed bids, the highest bidder wins, but pays only the amount of the second-highest bid, not their own. Economist William Vickrey showed this odd-sounding rule has an elegant payoff: since what you pay doesn't depend on what you bid, your best strategy is simply to bid exactly what the item is worth to you, no guessing games required. The insight, part of his 1996 Nobel Prize, underlies pieces of how modern online ad auctions are designed.