The basic problem is what price to set. You don't want to take the risk to set the price too high (probability of not selling at all) but at the same time you don't want to set the price too low (profitability). What if you could measure the complete demand curve for a product? Then you could simply select your ideal price without taking any risk while maximizing revenue or profitability. Vickrey auctions allow you to do exactly that because it incentivizes participants to reveal their maximum willingness-to-pay and a demand curve is simply the set of maximum willingness-to-pay sorted from high to low. How is that possible? Well, it involves a bit of game theory: https://www.quora.com/Why-in-a-Vickrey-auction-does-one-pay-... (Note that a Vickrey auction can be generalized to more than one winner and, thus, the price is not always the second highest price.)