> However, how does it work if no such answer was created?

I believe no bounty is awarded if the bounty conditions do not match.

> where the bounty was awarded to harrymc whose answer was 1 hour before mine, both have 2 upvotes and **both were posted before the bounty.**

That's not quite correct.

The bounty was started on 20th.

![enter image description here][2]

 You posted on Nov 21, 08:28, harry posted on Nov 21, 07:46. Community chose harry's because he had posted prior to you. Seems fine to me.



  [2]: https://i.sstatic.net/K5L4w.png
  [3]: http://i.imgur.com/k3j8Q.png
  [4]: http://i.imgur.com/CSwLD.png