What does the term 'bidding war' refer to?

The term 'bidding war' specifically refers to a scenario where multiple bidders actively compete against one another by continuously raising their bids for an item. This process creates an escalating situation wherein participants try to outbid each other, often leading to a final bid that is significantly higher than the initial asking price or previous bids. The competitive nature of a bidding war can drive prices up as each bidder seeks to secure the asset or item being auctioned.

In contrast, the other options do not accurately capture the essence of a bidding war. A single competitive bid does not imply the ongoing back-and-forth dynamic characteristic of a bidding war. An auction with no limit on bids can escalate but does not specifically illustrate the active, competitive dynamic of multiple parties bidding against each other. Similarly, a dispute over auction rules does not involve the bidding process itself and is unrelated to the competitive nature of bids.