[less_less]

It's not supposed to be some red line absolute max price, but rather "how much is this item worth to you?" You set that as your max bid price. If you get it at auction for less than that, you got a good deal, but if you buy it for more, you got a bad deal. If someone outbids you, then maybe it was worth it to them, but you (supposedly) would not have wanted to buy the item for that much, and would rather use your money for something else.

For tricky-to-price items like unique art pieces, the idea that you can pin this down might be a fantasy, but for commodity items it's pretty reasonable. If you can buy the same thing at costco dot com for $500, then it's probably not worth more than $500 to you, and if at auction you get outbid and it sells for $500.01 then you'll shrug and go order the same thing for a cent less, having wasted only a few minutes of your time. If the item you're bidding on is discontinued (e.g. it's last year's model) but you can buy a slightly better one for $550, and you can spare that extra $50, then again you won't be too sad about getting outbid. Online auctions are more popular for used items, but again in that case you usually still have an idea of what a used item is worth to you.

[mort96]

The logic of "you shouldn't ever need to snipe, just bid your max price" only works if we assume that the max price is a red line though. If I "value something" at $5000 (as in I want to buy it at $5000), and I bid $5000, and someone bids $5000.01, I would probably be happy if I sniped them and got the item for $5000.02.

[less_less]

I'm not defending "you shouldn't ever need to snipe, just bid your max price" as a hard principle, just trying to explain where the idea comes from. Sniping can be strategic for lots of reasons: you don't have to commit to a bid until the last second (in case you find a similar item for cheaper elsewhere), you deny other people information, you might avoid anxiety from wondering whether your bid will win, etc.

That said, the max price is supposed to be a price where you are not especially happy to get the item at that price, but not really sad either, a price where you would say "well, I hoped for better but I guess that's a fair deal". That's not realistically pinned down to the cent. But if you set a max price at $5000 and would be happy to get the item at $5000.02 (for some reason other than satisfaction from sniping), then you set your max price wrong, or at least differently from how economists expect you to set it.

[imtringued]

By your logic, there is no such thing as a limit or maximum bid. It's like you don't understand the concept of a maximum.

If you're always willing to add one more cent then that wasn't your maximum.