neither. I'm not sure how to make it more clear, but I'll try once more.
Here is how PPS mining works:
The pool gives you some data.
You repeatedly hash data + nonce to generate a "share". You submit the "share". If the share is "good", meaning hash is under some fixed value, you get a credit for it. Block is then split up among all credits.
Here is how auction payout works:
Same as before, except a share is "good" if it is one of the 10,000 best shares received (ranked by hash, with lower better).
The pool maintains a scoreboard of the 10,000 shares submitted with lowest hash value. So your share is only worth anything if it's one of the 10,000 best shares submitted. Certainly you can have multiple spots on the scoreboard, by generating multiple of the 10,000 best shares.
This scheme is immune to any kind of gaming, because, well, it is just a simple generalization of bitcoin's own payout model.