What prevents abuse of Max Bid if superficially applied to win an auction?

I advise you to never bid $1000 for a $100 widget.

What would you do if someone else had the same idea and bid $950? ...
Answer ... You win for $960.
It happens more often than you might think.

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What prevents abuse of Max Bid if superficially applied to win an auction?

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I dont see that as abuse, if the duffus wins for $960 (as in Puppy's example), more fool them.

Its a very costly *Once Bitten* lesson to go Nuclear when deciding one's maximum bid.

Whatever the second highest bid is, the winner will pay one increment higher.

Isn't there also something called shielding where you bid normally and then a stooge (same guy, different ID) bids really high straight away, retracting the high bid at the last moment. In fact - that could be a new tool for AS to implement - Auction Shielder. Now where's the address for suggestions? 100 free snipes here I come!

R2

I did have a lady place a proxy for around $200 for a $20. max item. Someone ran her up to about $60 and then let her have it. Boy, did she ever cry! She said she meant to place it for $20. I reduced the winning amount for her, but she could have really got stuck. Never, ever bid more than you really want to pay!

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I reduced the winning amount for her, but she could have really got stuck.

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That was rather decent of you, Mrs.M! Did you still pay the ebay ending value fee as if the winning bid was $60? I certainly hope she gave you WONDERFUL FB!

The strategy you describe is often referred to as "going nuclear" or placing a "nuclear bid". Such a bid can be placed as a proxy bid or as a snipe. Placed as a proxy with some time left in the auction and then cancelling/withdrawing the bid is an (unethical?) technique that has been used by shill bidders (either the seller or an associate of the seller) and/or competitive bidders to find out what someone's max bid is. In case of the shill, he will then place a bid just below what the revealed max bid was. In case of the competitive bidder, he will then often place a snipe bid just ABOVE what the max bid was.

Someone who places a nuclear snipe has NO TIME to withdraw/cancel it before the auction ends, should he discover he has inadvertently gone up against a competitive bidder using the same strategy.

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Since Bidder "A" has placed and in all likelyhood the highest Maximum
on the site, and will win item only at highest increment above next highest bidder.

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One fallacy of this strategy that definitely invalidates it for me is that you surrender complete control of what you will ultimately be responsible to pay to someone else -- the second highest bidder. What if the second highest bidder is completely NUTS and has no clue as to the true value of the item that we're bidding on? Or what if the second highest bidder is ALSO using the nuclear bid strategy? -- I would end up winning at a bid that I REALLY DON'T want to pay!!!!

There is NOTHING listed on ebay that I take a "money is no object" approach. If there is for you AND you have deep pockets, then maybe you'll perceive the nuclear bid strategy as appropriate for you. BUT, as Lexie suggests, it is quite likely (if not guaranteed!) that the longer you use the nuclear bid strategy, you will go up against some bidder using the same/similar strategy, and your response to winning the auction will not be, "Oh YAY!" , but will be, "Oh NO!!!!"

I've seen people put in max bids of $1000 in our system before many times for $100. Then we get the support case because someone else did the same thing and they won the item for like $990. Ouch. They put in $1000 thinking someone else might bid $125 or $150 or whatnot and they wanted to be sure to win. Then someone else came along with the same idea. It's best to just enter your true max bid and be done. If you're really willing to only pay as high as $190 in this case then just enter $190.

This nuclear bidding can also create an excessively competitive arena. There’s something about a bid that can’t be out-bided by several other bids/bidders. I don’t think I would call that “something” a bidding war. Not quite sure what to call that “something” – maybe the fastest-gun syndrome. Maybe it can be called bull-red-flag-waving (no, that doesn’t mean the bull is waving it). Now this is probably only a factor for proxy bids, as I don’t think the same dynamics apply when sniping.

And, if you are in a specialize area; you definitely don’t want to do this too often, as this can end up causing someone to seek revenge (they take it personal – I think). Also, what ever you do, don’t do this on concurrent auctions of comparable items with an excessive bid of the same amount; unless you want the seller to be very happy.

Jabber, yes, I did, but no big thing. She was soooo upset!