Counteroffers are made when they are in Priceline's best interest - ie, when they can convince you to bid several dollars OVER the amount they know is a winning bid. Since the overage is pure profit, and they make nothing if you discontinue bidding, PL is very motivated to get you to win at an excess of the actual listed rate.

Let's take a hypothetical example that assumes you know how PL works (summary: PL *must* award you the highest rate listed in its system that's less than your bid.)

Suppose there 4 hotels offering PL rates of $65, $75, $85, and $95. You are a savvy PL bidder, and you start out at $50. Using your free rebids, you bid up to $55 and then $60. At $60, PL knows that you are only $5 away from a listed rate and are therefore very likely to win soon. However, if you only bid $65, they don't make much profit. If they can convince you to bid $70 - $74 dollars, they can increase their profit substantially. So a counteroffer might be put forward for +$14. If you take it, PL gets their normal profit plus $9 bidding overage ($74 minus the listed rate of $65).

Now let's suppose the hotel listed rates are $65, $68, $71 and $74. As you bid up from $50 and approach a win, PL knows you are going to win soon, but there isn't much room for it to generate a profit. At $60, PL isn't very motivated to generate a counteroffer, because their bidding overage is likely to be very small anyway. They will let you keep bidding up until you hit a win and collect their booking fee profit.

The counteroffers are all generated when there is "headroom" in the hotel-listed rates that make it possible for PL to squeeze you for several more dollars. That's why it's never advisable to take the counteroffer - just keep bidding up in small increments and you are guaranteed to win soon.