The winner of the auction is not based on "willingness to risk a win/loss". The auction always ends at an absurdly low price because of the mechanics of the bidding, none of the participants ever drop out, because the price never goes above what they're willing to pay. Please read my comment or the paper again, this is not like an ebay auction at all.

For example, imagine a car auction that lasts only 20 seconds, with a random delay of up to 1 second, and with a very small minimum bid increment, say 2 cents, and no bidding fee or limit on number of bids. Now image 5 different people each outbidding each other by the minimum bid increment every 10 milliseconds. The price will climb by about $2/second, so by the end of auction, the winner will get the car for $40. Because everyone's bidding so fast, and nobody knows exactly when the auction will end, the winner is effectively random. At least on an expected value basis, this is highly beneficial to the participants vs actually bidding up to the true price of the car until other participants are not willing to bid anymore.