Conversely, under proxy bidding, the price paid is determined only by competitors' bids and not by the amount of the new bid; this eliminates the economically rational incentive to place a bid below the amount one is willing to pay or to place multiple increasing bids.
Conversely, in proxy bidding, the winning price is determined only by competitor bids, not by the amount of the new bid itself. This prevents bidders from strategically placing bids below their true value or making multiple increasing bids for a lower price.