Last week we explored how regular auction bidding processes work on eBay, detailing exactly how "auction style listings" work. This week I'll complete the answer by explaining how the baffling multiple-item Dutch auction works.

A common type of auction on eBay is a straight listing, in which the seller sets an initial price and each bidder indicates the maximum they'd pay if they win. The system automatically increments bids in a situation where there's more than one until one bidder drops out and the other remains the leader.

For this reason, you can bid $99 for something, win the auction, and end up only paying $17 or $33 for it: The end price depends not just on your maximum bid, but the maximum bid of any other bidders involved in this auction.

There's a nuance with regular listings I wanted to mention before we moved on to multiple item "Dutch" auctions: the reserve price. This is a price under which the seller won't actually sell their item, and it's both always higher than the opening price and secret, known only to the seller and eBay.

For example, let's say you're selling the Harry Potter magic wand prop from the first movie. You might specify an opening bid of $10 for the auction, but secretly indicate to eBay that you won't sell if it doesn't close with a winning bid of at least $750.

All that bidders would see is that the auction has a reserve price and that the "reserve is not yet met." They could bid and bid like mad until finally someone bumps it up above the reserve price, at which point it's like any other auction.

As you might surmise, reserve price auctions aren't a buyer favorite and are not that commonly found. They protect the interests of the seller by rather undermining the basic concept of auctions.

Multiple-item Dutch auctions

If you think that a regular auction with a reserve price is confusing, let's move into the most complicated part of eBay auctions: multiple-item auctions. It's inherently confusing, but let's try to step through it to understand what occurs.

Let's assume that you were digging through your parents' garage and found a box with 10 copies of Bob Dylan's first album in mint condition. Nice! You could list these as 10 different auctions, or you could sell them one at a time across 10 auctions, but you'd rather just get it over with so you choose to do a multiple- item auction with quantity = 10.

Your opening bid requirement is $5 and sure enough, it doesn't take long for collectors to find your auction and bid $6 each, 10 bidders. eBay will show each is in a potentially winning position and their winning bid is $5 (not $6 because no-one is competing against anyone else yet). If the auction closed immediately, they'd all be winners.

Hold on, though. One nuance of a multiple-item auction is that you can't enter a maximum bid: What you bid "is" your bid, though all auction winners pay the lowest winning bid across all items, so in effect you can still end up paying less than your bid, depending on how the auction ends.

Back to Dylan. A record collector learns of the auction -- we'll call him bidder 11 -- and bids $20 for five albums. Now is where things get complicated: Five of the CDs are taken by this new bidder, but what happens to the other five disks?

The answer is that the older bids trump the newer bids, so bidders 1-5 would be in the lead for the other five disks and bidders 6-10 would need to up their bid to stay in the running.

Confusing? Yeah. Worse, the new bidder might not pay $20 each for the five CDs, depending on the final winning bids. They might only end up paying $5 each, an amount lower than the earlier bidders!

Now bidder 6 comes back and bids $100 on one of these CDs. He really, really wants it. The lowest winning bid would still be $5, but bidder 6 now supplants bidder 5. (Remember, it's newest to oldest.)

If the auction now closes without any changes -- and this is when it really gets weird -- everyone pays the cost of the lowest successful bid. This means that bidder 11, who offered $20 per disk, and bidder 6, who offered $100, pay the same amount as bidders 1-4, namely $5 each.

This is an instance of when you can lose an eBay auction and see it close at less than your maximum bid! Kind of the luck of the draw.

Honestly, multiple-item listings make my head swim and I had to fact-check this column with a couple of eBay gurus to make sure I had this all correct myself!

Fortunately, you can pretty much ignore these nuances and just bid the max you'd pay on a multi-item auction, including indicating how many you'd actually buy. And that's all there is to it. The rest you can just ignore as magic.

Boulder resident Dave Taylor has been involved with technology and the Internet since 1980. Send him your questions at www.askdavetaylor.com.