May be a common question, but...

Is it possible to exploit the Google discounter to bid up your competition?

From what I gather, the discounter automatically lowers your bid to 1 cent higher than your competitors.

If company "A" bids a max click cost of $10.00, and company "B" is the next highest bid at $.50, then company "A" should only be paying $.51 per click (ignoring click through rates, and other factors).

If company "C" enters and places a bid at $9.99, would this mean company "A" would have to pay 1 cent higher, or $10.00, and company "C" would be lowered to 1 cent above company "B" and be paying $.51?