Does such an auction hold under the modification made for multiple participant?
Generally if you intentionally overbid you end up paying the otherwise highest amount discouraging that kind of action (ie you may as well put your max amount).
But if the top 10 pay the price of the 11th bid there’s a perverse incentive for me individually to just say I’m bidding $1 million because I know that most other players are likely to not be smart enough (at least in the short term) to bid strategically and thus I’m guaranteed to get the item at a steeper discount without having to reveal (or bother thinking about) my true max price for the item.
If you do that, there's a real risk you'll end up having to pay more than your max price. Say your max price is $2500, but you bid $1 million. Then it turns out 10 others have a max price of, and bid, $10000. You are now on the hook for $10000, significantly more than your actual max price.
Generally if you intentionally overbid you end up paying the otherwise highest amount discouraging that kind of action (ie you may as well put your max amount).
But if the top 10 pay the price of the 11th bid there’s a perverse incentive for me individually to just say I’m bidding $1 million because I know that most other players are likely to not be smart enough (at least in the short term) to bid strategically and thus I’m guaranteed to get the item at a steeper discount without having to reveal (or bother thinking about) my true max price for the item.