In a normal auction the winning bidder has to pay the price which he/she bid for. With this in mind, every bidder would try to bid a little less than what he/she thinks the item is worth. This is bad for the seller of the item since item might be finally sold for less than its worth. It might also be bad for the bidders because a bidder might value it a lot more than others and might regret it later. (Buyers remorse!)
In Vickrey auction the bidder with the highest bid wins but pays only the second best bid. The idea here is that all bidders will give a correct bid (true value of item according to them) if they know that they are going to pay less than what they bid.
--Shreejay
