From an emotional point of view, participating in an auction is very much like gambling. Bids are very much like bets, and the emotional charge of the bid dissipates as soon as somebody else outbids. But in reality, a significant number of eBay bidders relate to the auction in an addictive manner, meaning that their bidding strategies are designed in part to get an emotional kick that is not rationally related to the bidding process. Addictive bidding hurts the addicted individual's family members, it inflates prices in the marketplace, and it keeps goods out of the hands of the people who rationally value them the most. Limitations of the bidding mechanism.
Addictive bidding has another consequence, much more subtle but also much more significant.
Because of the secret maximum bid mechanism, it should not matter at what point in the auction one places a bid. But in practice, the bidding mechanism does not work perfectly. Addictive bidders, or those who are simply misinformed about the logic of the bidding process, are more likely to wait until the last moment to place their bids. They determine their bids not relative to their own personal valuation of the product, but relative to the bids that others have placed. But now it is in everybody's interest to bid at the last minute.