One thing I like about snipping is that it doesn't give the other guys time to keep raising the price. Let's say an item is going for $100. My max bid is $200. The other guy's max bid is $120. If I put my max bid in too early that other guy is going to keep trying to get it and raising the price to $150 before he gives up. Now instead of paying $120 I have to pay $150 or more.
If you are referring to bidding on just one isolated item, and intend on winning the auction, then I agree sniping has the best chance at winning it. But I can think of other situations where someone's bidding strategy might involve bidding other than sniping. Let's take these two SSKs for example, plus the third SSK up on eBay, the NIB one. If I wanted to win the auction for one and only one of those three, but was willing to accept any of them, it presents a bit of a problem. I'd like to get the one which represents the best value for my money, but won't know the final prices until after all three auctions are over and I cannot bid anymore. So making some educated guesses at what sort of price ranges they might go for, and doing some early bidding to try to force out some other maximum bids might be useful.
For example, let's say I estimate that the keycapless SSK will go for the cheapest, and the NIB will go for the most. The auction for the NIB finishes first. I balance out the fact that the NIB one is a brand new keyboard vs. this one is a used one, and come up with some percent over the used price that the NIB is worth. Let's say I calculate that for me, the NIB is worth twice that of the used one. So if I can force out of the used SSK a price of $150 before the bidding is finished on the NIB one, then I know that I can bid $300 on the NIB one and feel good that I'm getting good value for my money, being the used one is already half that price.
So someone may try to out another's maximum bid in the manner as what was done for such a reason.
As for reasons why someone might want to make a lot of small bid increments:
As stated above, maybe they only want one of the three keyboards up for auction, and don't want their bid to go significantly over the present bidder's maximum bid, being they're just trying to feel it out before the close of a different keyboard's auction.
Maybe they're interested in this or another totally different item, but only have funds to buy one. Buy feeling out the price this one might go for, and if the price goes beyond some point early enough, they can forget about it and concentrate on the other item they're interested in.
Maybe they're just having a bit of fun while bidding, and like to see how many bids they can get the auction up to. An auction with 50 bids looks more impressive than one with only 5 bids, even if the item ends up selling for the same amount. Beyond looking impressive though, it doesn't really mean anything, other than it might get more people interested in the auction.
Maybe they just like auctions where there's a lot of action, giving them some of the feelings of a real physical auction, rather than an online auction. Lots of emotions and psychological factors go into people bidding in auctions.
So the point is, you don't know the reasons for why someone else is bidding the way they do. You can think to yourself, they're bidding silly or foolishly, and maybe they are. But without knowing what's going on in their head, you might also be wrong.
