Pricing strategy for a sealed-bid auction

In this study, ways of influencing an auctioneer's revenue are investigated, via Auction Theory. We have developed a model with mechanism of payment for a winner in a sealed-bid auction. There are two standard methods of payment which may be used by a winner: first-price auction and second-price auction. The method of payment proposed in this paper as called w-price auction lies somewhere between these two standard methods. The most important point we wish to demonstrate is that running the w-price auction is superior to running either first-price or second-price auctions in a sealed-bid auction. Theoretical development is illustrated with a numerical example.