This is a form of auctioning invented by Columbia University professor William Vickrey. In this type of auction, participants submit bids without knowledge of the value of the other bids in the auction. The highest bidder wins, and pays only the amount of the second-highest bid.
Vickrey auctions can be multi-unit or single unit. In multiple unit Vickrey auctions the combination of bids that will bring the seller the most profit win. Online Vickrey auctions are sometimes open rather than sealed (i.e. all participants can see all bids that have been made).