Can a bid be automatically increased?
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A bid can only ever go as high as the amount entered, either manually or through something called a sniping service (that is where a bid is placed for you, usually in the last few seconds of the auction). But there is no way to set it up so that you automatically bid more than the amount you have enetered. There's a function called 1-click bid, which works if you've already placed a bid, but it's not quite automatic and still requires you to be sitting at the computer to do it manually.
Someone can be automatically outbid, though, as sparklz mentioned, because the price of an auction on eBay doesn't rise to someone's maximum bid when it is placed, they only go up in certain increments. That means if an auction is sitting at $5 and someone has placed a $6 bid, and the next person who bids puts in a $20 bid, the price will go to one increment higher than $6 (so $6.50). Lets say another person comes along when the price is at $6.50 and bids $10. Because the earlier bid of $20 is higher, that $10 bidder will be automatically outbid and the price will jump to $10.50.
Hope all that makes sense.
