Hello 'wingemud...',
What you describe sounds like the standard incremental bidding set up automatically on ebay auctions, depending on how much the initial bid is and how many others come along and try to overtake it.
Have you seen the following link that simply and clearly explains bidding on ebay:
http://pages.ebay.ca/help/buy/bidding-overview.html
There are all sorts of other related links on the page you can click on as well, such as automatic bidding and so on.