minimum bid increments - when they don't matter

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Why did I get outbid by less than one bid increment?

Let's say that you are the first bidder on an auction with the minimum opening bid being $5 and you bid a maximum of $20.
The item screen would show you as the high bidder at $5 and the proxy bidding system will bid for you up to $20 on your
behalf against other bidders.

Then along comes another bidder and they bid $9.00. The proxy system will notify that bidder that they have been outbid
and raise your bid amount to $9.50.

A second bidder then bids on this item with a bid amount of $20.01 and successfully becomes the high bidder for this item.

Now the question is, how was he able to do this? He should have had to bid to the next bid increment of $20.50, right?

Actually the answer is no. The important key point in this example to remember is that the high bid amount when this bidder
placed his bid was at $9.50. When the bidder placed his bid the system told him his bid had to be a minimum bid of $10 in
order to bid. That $10 amount reflects the next bid increment ($9.50 + $.50).

As long as the bidder meets the minimum bid amount requirement, any bid amount over the requirement will have satisfied
meeting the bid increment. In our example above, as long as the bidder bid at least $10, any amount would be acceptable
for his bid. What determines if he will become the high bidder on the auction is whether or not he bid an amount higher then
the maximum amount you had bid. In this case he did, you bid $20 and he bid $20.01.

Now lets change this example around a little bit. Using the same auction above, let's say the first bidder had placed a $20
bid. You would still be the high bidder on this auction because you had bid the $20 first. Then the second bidder comes
along and tries to bid $20.01. In this example, the system won't accept his bid because he did not meet the minimum bid
increment requirement. The system would only accept a bid of $20.50 or more. If he then entered bid of $25.00, he would
become the successful bidder at the high bid amount of $20.50.

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