It's not automatic bid. You can place a higher bid but Listia will use a number that's just enough to outbid other bidder. When you see this happens, you know that the current high bidder placed a much higher bid that he is willing to pay.
In short, you can place a max bid that you are willing to pay. But you may eventually pay much less if no one competes. You lose if someone else is willing to pay more.