What's the best way to deal with suspected bid inflation on eBay?

I’m currently bidding on a low price item on ebay. I’ve had a look at the bid history and there is one user besides myself bidding on the item, but the limited information ebay provides about the user is alarming. The user has very low feedback (1), is marked with the new user icon, and whenever he bids, he manually bids $1 above my current bid.

Now I understand that this could just be a normal user, that wants the item as much as I do but doesn’t understand about ebay’s maximum bid system… Or it could be another account for the seller trying to inflate the price of the auction.

What’s the best way to tell if this is what’s going on? And what can I do about it?