First-Price Auction

Also known as: English auction

In a first-price auction, the winner pays exactly the amount they bid — no adjustment, no discount. This stands in contrast to second-price (Vickrey) auction models, where the winner pays only the next-highest bid. The first-price model is familiar from art and commodity auctions, and has become increasingly prevalent in programmatic advertising as major ad exchanges moved away from second-price mechanics in the late 2010s.

The mechanics are straightforward: each bidder submits a price, the highest bid wins, and the winning bidder is charged their own bid in full.

Example: Bidder A bids $4.00, Bidder B bids $4.50, and Bidder C bids $4.20. Bidder B wins and pays $4.50.