Here's an auction I was playing in that closed Tuesday.
I believed the seller wanted to nudge me toward a threshold price acceptable to him. So for two days I got the 'outbid' banner on my watch list and of course the eBay notification. But I looked at the history of the higher bidder and 50% of his bidding had been with this particular seller. So my thought is that it was a shill bid. And a shill bid is not a real bid. So I didn't change my bid. I had been informed by the seller that this car (with a $30K Buy-it-now) had a reserve of $24K. At the last minute, a new bidder shows up and throws $24K (or more) at it and poof - it's sold.
Or, is it? Per the scenarios outlined in several posts above, the winning bidder has a long list of "outs," and may or may not follow through. So the seller may operate through eBay and send a second chance offer - but I don't know if you can do that with the second under-bidder. The first under-bidder, I believe, is a shill. So will this come back to me? (I talked with the seller, met with him and inspected the car). I bid what I would pay. If he comes back to me and says I can have it for $24K, that's no different than the deal I had 3 days before auction close. And I won't do it.
I have lost ZERO sleep over not winning this auction. I know what the car needs and what it costs to register it, etc. The story may be over, or not.
The key here is not to get emotionally involved in a.) the car or b.) the auction process. There's a reason they serve free booze to well heeled bidders at live auctions. Stay sober my friends.