Technically true...
however, I have no idea what their bids were. Always I'm the second highest bidder. If you asked me, would I pay $2.50 more than my high bid to get the item, heck yeah I would. If you asked would I pay $100 more, no, I don't like paying over market price no matter how much I want something.
It seems that this almost always happens with "desirable" auctions, there's just not enough stuff out there that I want to acquire so badly that it's worth it to me to pay for a sniping program. And I just don't make enough money to pay over market for anything, because who knows when I might need some and have to sell off some equipment, no matter how much I enjoy it.
Of course, you are the 'second-high bidder'. The winner only needs to go one increment above you to win. If you bid a max of $100 and he bids $500, he will win with $102.50, assuming a $2.50 increment at that level. You have no way of knowing what his actual max was. All you can know is that he bid higher than you.
Sometimes people will proxy bid (early) with what the bidding community on eBay calls a "Nuclear Proxy". Early bid for many times the avg selling price. "I'm going to be high bidder, or else!" Bidder clearly has bid WAY-Y-Y-Y-Y more than they actually would pay for the widget, but they don't think about the possibilities. Now, along comes N8Nagel, who is tired of losing for want of $2.50, and he says, "I'm going to win this thing!" In his determination, N8 bids several times the going price, at the very last second. The so-called Nuclear Snipe.
What happens? The software runs the two proxy bids against each other until one winner remains, and a hugely overinflated price. Whichever bidder had the higher bid, that person is the successful bidder, if you can call it that, given the price they now have to pay for the widget.
My bidding strategy is this: Bid once, bid your absolute max, and bid as late in the auction as possible. If I win, I win. If not, well, somebody wanted it more than me, because they bid a higher price.
I once bought an item for a gift, for a friend, with the so-called "Perfect Snipe".
One bid, in the last second, and one penny higher than the next highest bidder.
That one penny was enough. Never managed to match that feat, from that day to this.