The ``nibblers'' problem is irrelevant. If the nibbler had just bid his maximum amount at the beginning, just like you did, the same outcome would occur.

That's a pretty big if. I don't think all bidders follow this approach. I can't know what is going on in other bidders' minds, but I'd say I base what I do on my informal opinions on buying/bidding psychology (which may be totally wrong)

Let me use my successful Friday snipe bid for that Dell laptop par (It's actually not a perfect example, so I'll tweak it a bit). Let's say that the other bidder was my long-lost twin Bob.

I want that Dell part and I'm willing to pay up to $25. I find an auction with one day left and the last bid is 5 days ago for $14.49. For all I know that bidder (following your rule) has set a firm limit of $15 and will absolutely *not* outbid me if I bid $15.01. However, I consider what Bob might do if I place an open bid and he gets an e-mail saying that he has been outbid. There is the opportunity for him to say "Gee, on second thought I'd be willing to pay $18 for that part" and revise his bid accordingly. I don't know what the likelihood is of that occuring, but it isn't zero. Also, I think that behavior is in keeping with some common observations about auction psychology (again, I may be wrong!) In that scenario, I would have increased the probability that I would pay more than the $15.01 I did pay and conceivably even not win the item for the $25 I decided it was worth to me.

One reason I like sniping is that it is "fire and forget". I *do* behave according to your "pick your bid and stick with it" and I avoid any temptation to monitor the auction and marginally increase my bid to edge somebody out. If I win, I win. If I don't, I don't. I didn't want it that bad