Look carefully at these scenarios, Peter. Let's say I'm the first bidder on an item with $9.99 openers. I bid $12. I am now high bidder at $9.99. Now it's your turn to bid. With a 50¢ minimum bid increment, the least you can bid is $10.49. If you bid exactly $10.49, eBay will proxy bid for me one bid increment over your bid, and I will be high bidder at $10.99. You don't know my maximum bid.

If instead, you bid $11.25, eBay will proxy bid for me one bid increment over your bid, and I will be high bidder at $11.75. Again you don't know my maximum.

If instead, you bid $11.50, eBay will proxy bid for me one bid increment over your bid, I will be high bidder at $12.00. That's my maximum, but you don't know it because it's exactly one bid increment over your bid, exactly the same as if my max bid was $120.00.

If instead, you bid $11.75 (or ANY amount from $11.51 to exactly $12.00), eBay cannot bid a full increment over your bid on my behalf. EBay will raise the bid to my maximum of $12.00, and I will still be high bidder. YOU NOW KNOW that I am at my max bid! This is the ONLY case where I can still be high bidder and you know that I'm at my max. It's completely irrelevent that the bid jumped from $9.99 to $12.00. What matters is the difference between your bid and eBay's proxy bid on my behalf.

You know what you bid. I DON'T! So I don't know for sure what you know. Your bid of $11.50 and your bid of $12.00 produce exactly the same results... I'm high bidder at $12.00. Now, I DO KNOW I'm at my max. it's wise for me to ASSUME you know. And of course I'm free to raise my max bid. If I do, THEN I WILL know what you bid. Say your bid was $11.75 which bumped me to $12.00. I now bid $16.00. EBay will raise my bid to the proper full increment over your bid that they could not before, and I'll be at $12.25. If you had bid $11.50, I'd still be at $12.00 with my new max.

Robert was absolutely correct in everything he said, except the statement, "If you ever see that your high (proxy) bid is less than 1 full increment higher than your posted high bid, you know that the underbidder knows you're at maximum." That statement doesn't make sense. The only time the underbidder is still the underbidder and knows your max bid is when your bid is AT MAX. In that case, I don't know the increment eBay bid for me over the underbidder's max bid. The increment from my previous high bid is irrelevant.

If you think I'm wrong here, please provide an exact scenario.