A Vickrey auction is a type of sealed-bid auction where bidders submit their bids without knowing the others' offers. The highest bidder wins, but the price paid is the second-highest bid. This format encourages bidders to bid their true value, as they won't pay more than necessary. This auction format was named after William Vickrey, a Canadian economist who won the Nobel Prize in 1996 for his work on auction theory. Vickrey auctions are often used in various applications, including online advertising and public resource allocation, due to their efficiency and incentive for honest bidding.