# Second-price auction

An auction in which the eligible winner's price is based on the next qualifying bid, subject to stated rules and floors.

An auction in which the eligible winner's price is based on the next qualifying bid, subject to stated rules and floors.

## An example

A $4 CPM bid wins over a $3 bid and pays according to the second-price rule and any specified increment.

## Why it matters

Do not assume every exchange uses a pure second-price rule or ignores floors and fees.


## Related terms
- [Auction clearing price](https://jolts.xyz/resources/glossary/auction-clearing-price)
- [Bid floor](https://jolts.xyz/resources/glossary/bid-floor)
- [First-price auction](https://jolts.xyz/resources/glossary/first-price-auction)

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