i would guess it's also about trying to intimidate the opponent to not bid anymore, to make them think "if she is going to raise it this much every time, is there a point for me to even bid"
i mean at the end of the day, auctions are mind games and like this you could win by raising a lot even if you didnt have that much money
Not that I'd be an auction expert, but in my opinion it's not really a mind game. The only mind game I can think of is the xianxia cliche, where the main character manages to troll a disagreeable character to pay way more than necessary for an average item.
Like I said in my first comment, everybody has their upper limit. The absolutely upper limit for the whole auction, dictated by the thickness of their pocketbook, and a budget per item, assuming they may want to bid for more than one. What does it matter if the limit is reached fast or slow? The only thing that matters is your own budget and your own interest. How exactly can you be intimidated by someone else's budget? You may be frustrated by losing, but that's just how auctions work.
The only way to be intimated, for real, would be to notice you are competing against a ruthless gangster, a dictator's butler, or something else along those lines.
For the seller/auction house, it's naturally a mind game. They would want to make the bidders imagine the items are worth as much as possible. The auction house may even cheat by having an agent raise the price.