“In a second price auction, the person with the highest bid wins the auction and pays a price equal to the second highest amount; the winner either exchanges their typical product for the novel product or obtains the good in the randomly selected auction, depending upon the chosen implementation method. All losing bidders either retain their typical product or obtain nothing. In theory, each bid in this auction reflects a bidder’s value or willingness to pay for the good(s). The beauty of a second price auction is that a person cannot be made better off by misrepresenting his or her actual value.”
Lusk, J., Shogren, J.F., 2007. Experimental auctions: methods and applications in economic and marketing research, Quantitative methods for applied economics and business research. Cambridge University Press, Cambridge ; New York.