Hi Steve,
One of the problems here is the starting bid is too low. Any seller that starts a bid well below value is just ASKING to have to sell for less than the item is worth unless they use a reserve. We've discussed reserves enough so I will not go into that issue. This is not to say I think what the bidders in your example was did was right. It was not!! BUT, sellers could protect
themselves somewhat by using a starting bid closer to the actual value or the lowest price they "want" to accept. Bottom line: Put a realistic starting
price on the auction and reduce the opportunity for this type scenario

Paul