As a buyer, it would be ridiculous to continue bidding against someone like you describe. The person who has to be top bidder drives the price up, but ONLY if someone else feels the need to outbid that person. If everyone waits and tosses out a snipe bid, then that person won't have a chance to bid up the price.
The best way I have found to deal with an auction is to place the smallest possible starting bid and then set up a snipe bid for the last seconds. This method still allows me to see who the winner is, if not me, and hopefully keeps the overall price as low as possible if I win.
Of course high early proxy bids and other snipers will affect prices regardless of what bidders do in between opening bid and the hammer falling, but I believe that there is no good reason to keep bidding for the sole purpose of being high bidder.
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