[koepked]

The highest bid does win every time, if you realize that a bid in this situation constitutes more than just price. Price is one way to motivate a seller to perform a service for you. In this case, another way is to have a great site to match your service, which contributes to the overall reputation of the AdWords program. There are also other ways to motivate, and all the secret sauce you commented on is probably to handle them. Add up all of this motivation and call it a bid, and the highest bid wins always, even though the highest price may not.