Personlly, If I were bidding on the auction, it wouldn't bother me.
If I bid $160.00, that meant I was comfortable spending that much money. If I didn't wanna spend that much, I wouldn't bid that much.
I wouldn't do a second chance offer, either. I'd tell him to leave negative feedback to the deadbeat seller and relist it. But he won't casue it "may" be one of the sellers second names.