In that case in a regular auction how do we play it? You call 2 then I call 3, then you call 4. Basically you are adding more 2 with the previous call. So it's accumulation. I was expecting the same but it seems it's not the case.
In a regular auction, you only pay your last bid. Here, you pay every bid. I don't think it really matters, as long as it's clear.
Yes. This is more like a form of all-pay auction, such as the Tullock auction, in which all participants submit a bid and the outcome is determined by the highest bid. However, unlike a traditional auction, in this type of auction both the winning and losing bidders are required to pay the amount of their submitted bids.