1. Yup, two incentives, in addition to altruism. First, it's likely that the total bids will be inflated, and the seller can get a cut of that (though I'd probably limit what percent, since the idea works best at 0%). It's like the party game where you auction off $1.00, with bidding starting at $.01, but where you say that both the winner and the second-highest bidder have to pay you: people will keep bidding it up (for my site, because they have something to gain if they lose). Second, because a smaller group can support a reasonable auction, and you might want to sell something just to your friends.
2. Nope, you only get the amount you bid over other bidders (this being the real measure of how much more you want the item). In your example, you lose $69.99 total, when you pay C's $70 bid: $10 to A and $9.99 to C (and $50 to the seller). Creating multiple accounts has the same effect as re-bidding.
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timeasmymeasure
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Date: 2007-11-21 02:00 am (UTC)2. Nope, you only get the amount you bid over other bidders (this being the real measure of how much more you want the item). In your example, you lose $69.99 total, when you pay C's $70 bid: $10 to A and $9.99 to C (and $50 to the seller). Creating multiple accounts has the same effect as re-bidding.