I’ve bid at a couple of house auctions (at one of which I put in the winning bid), and I’ve observed several other house auctions. At these, the stakes are pretty high, as the price is likely to be some multiple of your annual income. In addition, these are public live auctions, where the auctioneer and the bidders are gathered together so they can all see and hear each other – though many people there are just interested spectators, who have no intention of biddng.
Of course, with these you need to do a lot of preparation in advance, including lining up your house loan, as well as knowing your market, so you have some idea of what the house will sell for as well as how much you want to pay.
My observation is that serious bidders want to bid slowly: either bid a low price at the start of the auction, or wait until other bidders have pushed the price up a bit. The psychology seems to be that they don’t want to look to enthusiastic, as that might encourage other bidders to engage in a bidding war. However, it might also be that they are genuinely reluctant to spend so much money.
I have wondered if an opposite strategy might work: make your low-ball bid early, then whenever someone outbids you, bid again immediately a small increment over them. That way, others know you want to buy the house, but they don’t know how far you will go, so they might want to stay out of a bidding war. Of course, you have to know when to stop: if your limit is $500K, let it go if the bidding reaches $501K. However, I’ve never seen a person use this strategy.