I don't understand this line of reasoning. I don't do auctions, but if I did, it would be because I want that item. When I want something, I never have an absolute hard price ceiling; if I'm willing to pay $10000, I'm willing to pay $10000.01. I can't imagine anyone who would be happy to pay $X for an item but not $X + $0.01.

Like, if I'm at a store and an item costs $500, and I bring it to the checkout and the cashier says "oh sorry that was mislabeled, it's $500.01 not $500", there is no world in which I go "okay never mind then, $500 was my max". There does not exist a situation where I've decided I want something at price $X, but would not buy it at price $X + $0.01, because $0.01 is absolutely negligible.

So where does this fantasy of an absolute max price come from?

But I want to get the item as cheaply as possible, not pay as close to my maximum without going over.

Not everyone is in auctions for the game, some people want to actually get the item. Though I imagine there's less and less of them, as most figured out long ago that auctions are a stupid waste of time.

In fact, I'm somewhat angry at sellers setting up auctions if there's no other way to acquire a specific item. Why they won't put a minimum price they're happy to part with some items for, instead of wasting time of a lot of people by withholding target price and pretending they're earning premium through work?

But if that someone isn't rational it is better to not give him the time to react to your highest bid.

Also some sellers seem to use some fake accounts to bid high on their own item, revealing your max bid, then cancel their bid, then bid right under your max bid to maximise their sell price. Happened to me twice, and now no longer setting my max bid in advance since.

It gets into the nature of "Which grain of sand makes it a pile?"

Knowing people bid snipe by bidding one cent over whole dollars, would you consistently bid two cents over if it meant you would win more of your auctions?

One cent is negligible. If you asked me if I would have paid $10.01 instead of $10.00, I'd probably say "Sure". $10.02? $10.03? Like, where does the line get drawn?

And then you come at it from the other way. Let's say I'd pay $10, but not $11. But what about $10.50? $10.25? Or we can go down by pennies again.

I agree, put in your limit and walk away. If you get overbid, even by a cent, don't sweat it. That's the game. But I can see why people get frustrated when they lose an auction by one cent.

If you enter your maximum bid in ebay you're revealing it. With sniping no one can discover your maximum bid.

The 'nibblers' will invariably show up and bid small amounts until they exceed your maximum bid, while not revealing theirs.