Auction houses are not allowed to place bids whether they know the ceiling or not. If there is a reserve, they must state so in the lot description.
And I know the rules are different for a live auction, such as Sotheby's or Christie's. When you bid there, and the auctioneer calls out the bids, you have absolutely no idea what is going on- you don't know if they are real or just the house bidding up to the reserve.
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