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IncBid

What a Vickrey auction is

A Vickrey auction is a sealed-bid, second-price auction. Everyone submits a secret bid. The highest bidder wins, but pays the second-highest bid — not their own. Honesty about your ceiling does not raise the price you pay.

On Inc Bid each invited buyer submits a range:

Minimum bid
The least you will pay for the business.
Maximum bid
The most you will pay. Treat this as your true ceiling.
  1. 1. Reserve. Any range whose maximum is below the seller’s minimum required bid is set aside.
  2. 2. Winner. The highest maximum wins. Ties go to the higher minimum, then to whoever sealed their range first.
  3. 3. Price. The winner pays the highest of the reserve, the second-highest maximum, and their own minimum. The price never exceeds their maximum. A lone qualifying buyer pays the reserve, or their minimum if that is higher — not their maximum.
  4. 4. Buy It Now. If the seller set a Buy It Now price, a buyer can offer it while the auction is open. The seller is notified and may accept. Accepting closes the auction at that price and tells every invited buyer. The price is shown. The buyer’s name is not.

A worked example

The reserve is $1,000,000. Avery’s ceiling is higher, so Avery wins. The price is Blair’s maximum, the second-highest ceiling — not Avery’s own maximum.

Avery

Minimum $900,000

Maximum $1,400,000

Wins · pays $1,250,000

Blair

Minimum $1,100,000

Maximum $1,250,000

Does not win. Sets the price.

Lowering your maximum cannot improve the price. It can only make you lose a business you would have wanted. Until the auction ends, other buyers cannot see your range, and the seller sees who has bid but not how much. After the clock stops, the seller accepts the result before it is official. Other buyers then see the winning price only, not who won.