Victory auction

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A victory auction is a type of auction in which the bidders to purchase an object write down their bids, and the bidder with the highest bid wins, but pays the price bid by the second highest bidder. The object of a victory auction is to discourage 'gaming' of an auction, where people propose prices less than they are willing to pay in order to pay less than the maximum price they would pay, instead the auction does this automatically, by giving the win to the highest bidder, but at the price which was the one just below theirs.