Originally Posted by RLG
The main reason to snipe IMHO is that too many people will be determined to outbid you no matter what bid you enter. By putting in your actual highest bid at the end, they don't get the chance.
I agree completely. The rational explanation for why sniping works is that other bidders' valuation of the auction can change when they get additional information about how you value the item ("I was only going to spend $10, but since that guy thinks it's worth $11, it must be worth $12!"). By denying them that information until it's too late for them to increase their maximum bid, you stand a better chance of beating out these "irrational" bidders.