Vickrey Auction

As an auctioneer in a silent auction, to maximise profits, you should use the Vickrey auction.

A Vickrey auction allows the highest bidder to win the auction, paying only the price that the second-highest bidder chose.

1. Allows for the highest bidder to not feel slighted that he could have paid a much higher price than the second-highest bidder.
2. Encourages the bidder to place a bid at maximum because he does not want to lose the bid
3. Allows the bidder to place a maximum bid that he is willing to pay, knowing that he will never need to pay that maximum