I frequent antique and estate auctions quite frequently. This happens all the time.
There are those that bid up their competitors so they get less of a profit. The new sneaky thing is bringing along a 'friend' or employee to bid up for them so that the competitor doesn't know who bid them up.
Myself, if I am outbid past my limit depending on how easy a read my competitor is I'll bid him up, especially if I know we are interested in an item that will be coming up later. Morally, I don't feel it's wrong as it could go either way. I could end up losing my shirt over an item, but I can also lower the amount of liquid assets of my competitor, increasing my chances of getting what I want. I've only bid on a few items that I had no interest in as a competitor was bidding on it, and so far I haven't lost.
To be frank, if you go to an auction expect dirty tactics as it seems to be the nature of the game. Morals are left at the door.
To answer your question, I'd do it. However, as Eggs said, they better have the funds ready in case it goes awry.