A couple of examples should clarify how proxy bidding works.
Suppose the current high bid
is $127.50, and the maximum bid the high bidder entered is $150.00.
If you enter a maximum bid of $130.00, eBay will accept your bid, but will immediately
enter a proxy bid for the other high bidder of $132.50. The other bidder is still the
high bidder, with a bid of $132.50 instead of $127.50.
Now suppose you enter a maximum bid of $200. eBay will show you as the high
bidder with a bid of $152.50—the former high bidder's maximum bid plus the
bid increment. If no one outbids you, that's what you'll pay.
Thus there's no reason to enter a maximum bid that's
less than you're willing to pay. In theory, you can just enter your
maximum bid of $200.00 at any time and sit back to watch the action.
Life is rarely that simple and logical, though,
and eBay bidding is no exception. Bidding strategies complicate things,
as the next page explains.