Suppose we have a sequential version of an Auction game:
• Player 1 places a bid.
• Player 2 observes player 1’s bid, then places a bid.
• The player with the highest bid wins the item at auction.
• In case of a tie, the winner is determined randomly (with equal probability among
those tied).
• The winning player pays his bid.
Two players bid for a rare bottle of Scotch. This is an auction in which they
can bid any amount in $\Bbb R\_+$. Suppose the two players both value the item at £500.

Find all pure-strategy Nash equilibria of this game.

The answer provided didn't seem too intuitive:

1. Player 1’s strategy is to bid 500.
2. At the information set following 1 bidding 500, Player 2’s bid is in [0, 500].
3. At all information sets where 1 bids any x1 below 500, Player 2 bid is in (x1, $\infty$).
4. At all information sets where 1 bids above 500, Player 2 bids anything in $\Bbb R\_+$.

I somehow get that we do NOT need to consider sequential rationality, but how does point 4 follow i.e P2 bids anything in $\Bbb R\_+$?

Any help will be greatly appreciated.