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Originally Posted by Paul
The seller can't see the bidder's max bid - however it's not unknown for sellers to have other ebay IDs and to bid against their own product which will then show up the maximum bid of the legitimate bidder. I've had this done to me more than once - the seller used another ID to outbid me, which then revealed my maximum bid. The seller can then cancel the 'fake' bid once they've established what your max bid is.
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This is called "shilling" and is strictly forbidden. That doesn't mean it never occurs, of course.
http://pages.ebay.com/help/policies/...l-bidding.html