From the FAQ’s: “Our auction system is based on bidding by a proxy method. That means that you can place a maximum bid and allow the system to bid on your behalf up to your maximum. Your maximum amount won’t be visible to other bidders, only to you.
If your maximum amount is higher than the previous bidder’s maximum, the auction price will increase to $1 higher than the previous bidder’s maximum. If your maximum is lower than the previous bidders maximum, you will be automatically outbid by the previous bidder, for $1 higher than your maximum.
Consider the following example:
We have two users, Dave and Ted.
A new storage auction begins at $10.
Dave places a maximum bid of $100.
The final auction price is now: $11.
Ted comes along and tries to outbid Dave, so Ted places a max bid of $50.
Ted has not outbid Dave (because $50 is less than Dave’s max bid).
Ted will receive a notification informing him that he has been automatically outbid.
Dave is still the winner and the system auto bids on Dave’s behalf.
The final auction price is now: $51.
Ted decides to place another bid, this time he sets his maximum bid for $250.
Ted is now the highest bidder.
Dave will now receive an email, informing him he as been outbid and is no longer the highest bidder.
The final auction price is now: $101. The auction timer ran out, and the final bid was $101. It is important to note that although Ted set his maximum bid for $250, he will only have to pay $101 because that was the current final auction price when the timer ran out.”