How do ebay increments work?

Question

I'm very curious and confused on this. From what I understand, if something's starting bid is $4.99 and you bid $20, it will only use the minimum amount necessary to win. But if someone then bids.. say, $6.00, then your bid automatically goes up to $6.00. And that repeats until your maximum bid has been reached.

Can someone explain (in detail) the following scenarios?

1) An ebay item starts at $4.00. Someone decides they're willing to spend $50 for that item, so they bid $50 on it. At the end, he is the only one who bid on that item. Does he have to $4.00 or $50?

2) An ebay item starts at $10.00. A bid war goes on and you place $200. You ended up having the highest bid. Now, do you pay $200, or whatever the previous maximum was?

I'm curious because couldn't someone just bid $200 on every item they see (if the first scenaro is true)? Thanks.

Answer 1

1) The opening bid is $4, and no one else bids, the winning bid will be $4, no matter how much was placed in reserve on it.

2) Suppose in the bidding war, the ending maximum bid is $125. That would be the final price for the item.

3) Yes, a person could bid $200 on anything they wanted, but then they must be prepared to pay up to that amount on each item. It could be bid up if others keep bidding. I never place a bid on an item that is more than I want to pay. If you are willing to pay $200 for the item, then go for it ... you may get it for less, or may not.