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Posted By: <b>pas</b><p>Suppose the bid is at 3000 and I am willing to go to 3300. If the bidding increment is 10 percent, I have to go to 3300. If the bidding increment is $100, I can win the card for 3100 even though I was willing to pay 200 more.

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Posted By: <b>leon</b><p>I agree...in an auction format we do have to use increments or else folks could bid .01 more and keep going almost forever.....The increment strategy is the way all auctions are run. If we want to get as technical as you are talking then we need to bring in shipping and handling and/or tax into the equation too. As I said...shilling is fraud and artificially raises what would otherwise be a free market price, incrementally speaking. There is no justification for fraud, as hard as you try.....imo...<br /><br />response to Peter- yes, I agree with you about the "incremental" pricing not being exact...but in this equation raising increments by shilling is fraud, and I believe illegal....but otherwise, of course you are correct....that is obvious...and it's obvoius that shilling is fraud.

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Posted By: <b>davidcycleback</b><p>For many people who were shilled, when they turn to resell the item that's when they realize that they didn't pay a fair market price for the item. It's not unlike when someone buys a card at market value, then when he turns to resell he's informed the card's a reprint. These are different ways to cheat someone out of money. The person didn't realize he was cheated at the time-- he may have been pleased with his purchase at the time-- but he later realized he was cheated. In either instance you would be unable to convince the person he was wasn't cheated out of money. <br /><br />Many collectors and non-collectors don't know the true market value of their items until they try and sell-- I'm sure we've all had personal experiences with this--, and value, grade and even true identification are not discovered until that time. This is why unhappy revelations about worth, authenticity and the ethics of the dealer sometimes don't happen until long after the items were purchased. <br /><br />Besides, if shilling is illegal, the theoretical arguments are moot. Theoretical arguments don't wouldn't make it any less illegal.

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Posted By: <b>T206Collector</b><p>No one is debating that shilling is fraud. The issue is, to me, one of market efficiency and consumer protection. Notwithstanding its fraudulent nature, shilling could actually lead to healthier free markets, but we choose to protect consumers from the unknown -- similar to insider trading laws (but don't get me started on those). <br /><br />For me, bottom line is I have never paid more for an item than I was willing to pay. What a fictional second bidder was willing to pay is really not much of a concern to me, and I would consider it more like an unknown hidden reserve. But, believe me, Leon runs an auction house (hi Leon), I can't imagine he would ever bite into any of what I am saying, let alone in a public forum. And I am sure Leon would keep stating shilling is illegal (again, we all agree) even if he did not run an auction house.<br /><br />"For many people who were shilled, when they turn to resell the item that's when they realize that they didn't pay a fair market price for the item."<br /><br />I disagree with this statement because if they were voluntarily paying a price for an item, it is by definition a fair market price. I do not consider what a second person was willing to pay -- either genuinely or shillingly -- as being a more true indicator of fair market value. Moreover, your concerns arise even in the context of a fixed price sale. <br /><br />I have a fundamental problem with people who are willing to pay a certain price for an item wanting someone to protect them from their own actions/determination of fair value. We have lots of consumer protection laws, and not all of them are beneficial to our society.<br /><br />"It's not unlike when someone buys a card at market value, then when he turns to resell he's informed the card's a reprint."<br /><br />Actually, I think it is closer to when someone buys a card at a fixed price, then when he turns to resell he learns that there is no market for the card -- similar to your explanation below:<br /><br />"Many collectors and non-collectors don't know the true market value of their items until they try and sell-- I'm sure we've all had personal experiences with this--, and value, grade and even true identification are not discovered until that time. This is why unhappy revelations about worth, authenticity and the honesty of the dealer sometimes don't happen until long after the items were purchased."<br /><br />Everything you just described is true even if we lived in a world without shilling. As such, these concerns cannot alone provide a rationale for why shilling is illegal. <br /><br />"Besides, if shilling is illegal, the theoretical arguments are moot. Theoretical arguments don't make it any less illegal."<br /><br />Of course not. Fortunately, we live in a country where I can question the rationale behind our laws. Most people feel cheated by shilling -- it's in their gut, they just know it's bad, etc. So we have laws to protect people from this and other bad stuff, real and perceived. Some laws that we have to protect people actually may hurt our economy or our enjoyment of life. It's kind of like mandatory seat belt laws, or motorcycle helmet laws. There are plenty of people happy to ride their bikes without the government telling them to keep their heads covered.<br /><br /><br><br>_ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ _ <br /><br />Visit <a href="http://www.t206collector.com" target="_new" rel="nofollow">http://www.t206collector.com</a> for signed deadball card galleries, articles and more!

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Posted By: <b>davidcycleback</b><p>One last point is many collectors raise their bid because they think they are competing against a fellow collector-- a collector who is simultaneously expressing his valuation opinion for the item-- not a phantom pseudo bid. Many people also value a rare item by looking to see what other fellow collectors are bidding, not a made-up pseudo bid from a collector that doesn't exist. Collectors regularly use what other honest collectors bid and are willing to pay to help determine value and pricing. After all, it is these same fellow collectors who will be the potential buyers if one wins and resells the item If a collector wins a an item for $1,000 (shill bid underbidder $950), then finds out the next highest real collector bid was at $490, you bet he will feel cheated. <br /><br />Also realize that for many of those horrible fake T206s and such, the fraudulent seller will use multiple shillers to get the price fake high so it appears that there's lots of bidder interest in this convincing others that the card is legitimate. This shills are almost like advertising. Many shillers will raise the bid real high in the hope there's one sucker bidder who will top it at the end. If there isn't the sucker bidder, the scammer will relist it and try again. Thus, in an ongoing shilled auction, the high bid may be $500 when highest bid from a real bidder is only $20 or there are no bids from a real bidder. <br /><br />When people use past prices on eBay as a price guide, there are two questions: 1) How many of the auctions were paid for, and 2) How much of the pricing is due to shilling. An earlier argument was "If you place a bid knowing what a card is worth ..." However, if you're using past pricing to judge what a card is worth, how do you know you know what a card is worth? What you may calculate as the market value of the card may be derived from shilled numbers.<br /><br />If straight bidding was the only way to auction on eBay, I might consider arguments over the merits of shilling. However, eBay offers the seller a plethora of different ways to auction or sell or 'protect his investment.' The seller can set the minimum at any amount he choses, he can use a reserve, buy it now, make-best-offer. eBay offers enough choices that there really is no good excuse for resorting to shilling.

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Posted By: <b>jeffdrum</b><p>It does not pass the smell test, it is wrong plain and simple. How can it be right when the person engaging in the activity has no intention of completing the transaction or being party to a sale. It is artifical price manipulation.

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Posted By: <b>T206Collector</b><p>"One last point is many collectors raise their bid because they think they are competing against a fellow collector-- a collector who is simultaneously expressing his valuation opinion for the item-- not a phantom pseudo bid."<br /><br />I would never bid this way, but even if I did, you voluntarily moved to a higher price point. You can never assume, even in a free market, that that bidder will be there next month when you try to sell.<br /><br />"Many people also value a rare item by looking to see what other fellow collectors are bidding, not a made-up pseudo bid from a collector that doesn't exist."<br /><br />Again, your legitimate fellow collector may not be there next month either.<br /><br /><br />"Collectors regularly use what other honest collectors bid and are willing to pay to help determine value and pricing."<br /><br />Agreed, but I use final sale price, which could be more accurate in a shilled world. Wouldn't you rather know what the top bidder was most willing to pay, as opposed to what he wound up paying?<br /><br />"After all, it is these same fellow collectors who will be the potential buyers if one wins and resells the item If a collector wins a an item for $1,000 (shill bid underbidder $950), then finds out the next highest real collector bid was at $490, you bet he will feel cheated."<br /><br />I understand your point, but again think it irrational to assume that the next highest real collector would ever return to bid on that item.<br /><br />"Also realize that for many of those horrible fake T206s and such, the fraudulent seller will use multiple shillers to get the price fake high so it appears that there's lots of bidder interest in this convincing others that the card is legitimate. This shills are almost like advertising. Many shillers will raise the bid real high in the hope there's one sucker bidder who will top it at the end. If there isn't the sucker bidder, the scammer will relist it and try again. Thus, in an ongoing shilled auction, the high bid may be $500 when highest bid from a real bidder is only $20 or there are no bids from a real bidder."<br /><br />Yes, there are suckers born every minute -- many of them are bidding on Wagners on ebay and I have very little sympathy for them. To the extent shilling is being used to make fakes look more real, the issue is really in the sale of the fake, not the advertising done to promote it.<br /><br />"What you may calculate as the market value of the card may be derived from shilled numbers."<br /><br />If Person A pay is always willing to pay $5,000 for a card that no other person is willing to pay more than $1,000 for, then that card will never show $5,000 as the true value, unless that card is shilled. If you owned that card and were considering selling, you'd think $1,000 was a fair price, but you'd kick yourself to learn that someone was willing to give you $5,000 for that card. <br><br>_ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ _ <br /><br />Visit <a href="http://www.t206collector.com" target="_new" rel="nofollow">http://www.t206collector.com</a> for signed deadball card galleries, articles and more!

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Posted By: <b>Eric Brehm</b><p>It's cheating, it's fraud, and I hope people can and will be prosecuted for it.<br /><br />I too have noticed how often the same exact items are offered for auction repeatedly, typically at different auction houses each time. I can't believe all of these items are being legitimately returned to the market so many times in such a short span of time. Maybe the auction houses are buying each other's items in some cases, but it makes me wonder if they are somehow colluding with each other as well: e.g. if an item doesn't sell at House A at one bid above the shilled price, House B agrees to list it in their next auction to avoid arousing suspicion if House A were to list it again. And the phony 'sale' at House A sets a new false standard for what the item is 'worth' when it is offered by House B.

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Posted By: <b>davidcycleback</b><p>The only intent of shilling is to add fake bids in order to artificially raise the bidding of others. To a seller who finds nothing wrong with this, what would you think if a bidder used computer software to block competing collectors from placing bids, thus allowing him to win the lot at an artificially lower price? The shiller artificially add bids to raise price, the bidder with the software artificially removes bids to lower price. Other than they are working in reverse to each other, tell me they aren't equivalent. Let me guess, a shiller wouldn't be too happy with a bidder removing bids.<br /><br />The shiller argues that a collector should place a maximum bid he's comfortable with, and if the max was too high that was the collector's fault. The bidder with the reverse-shilling software would argue that the seller should place a minimum bid at a price he's comfortable selling at, and if the minimum bid was too low that was the seller's fault.<br /><br />

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Posted By: <b>T206Collector</b><p>But I think you're missing my fundamental point, which is market efficiency. In your reverse example, the price realized isn't reflective of what the highest voluntary bidder was willing to pay -- what I believe is the closest true market value for the card. <br /><br />In other words, I do not think you are "artificially raising the bidding of others" when you are forcing the high bidder to pay closest to what he is willing to pay for it.<br /><br />You keep saying "artificial," but my premise is founded on the notion that the high bidder was a rationale acting placing his ceiling bid voluntarily. The only "artificial" is the underbidding, but since we arrive at the highest accepted value for the item, markets clear.<br /><br />"The shiller argues that a collector should place a maximum bid he's comfortable with, and if the max was too high that was the collector's fault."<br /><br />No. That was the collector's reflection of the appropriate market value.<br /><br />Again, answer me this question: if you were selling a rare card, would you want to know what the second highest bidder was willing to pay or what the first highest bidder was willing to pay? In a non-shilling world, you will only ever know what the second highest bidder was willing to pay.<br /><br /><br><br>_ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ _ <br /><br />Visit <a href="http://www.t206collector.com" target="_new" rel="nofollow">http://www.t206collector.com</a> for signed deadball card galleries, articles and more!

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Posted By: <b>Eric Brehm</b><p>But how do you know how much you are "willing to pay"? For me, it is always either "no more than the current bidder" or "a little bit more than the current bidder" (who becomes the second highest bidder in the latter case).

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Posted By: <b>Matt</b><p>Paul - I'm interested in discussing your point in terms of setting market (although I don't think it has bearing on the correctness of shill bidding). You said:<br /><br />"But I think you're missing my fundamental point, which is market efficiency. In your reverse example, the price realized isn't reflective of what the highest voluntary bidder was willing to pay -- what I believe is the closest true market value for the card."<br /><br />I'd suggest that correct market is not determined by what 1 person wants to pay but rather what 2 people are willing to pay and therefore a pure auction is the best determinate of market price. When dealing with rare items, once a buyer has his, assuming identical conditions, the next one would not sell for that much and hence that is not the correct yardstick to use for measurement of what the second one is worth. On the other hand, if market is set by what 2 are willing to pay, then you have a self-correcting system for at least two reasons:<br /><br />1) The underbidder didn't get the item, and having already committed to spend that much on it, would likely be willing to do so next time. That would give a subsequent seller the correct price to ask and receive. There is certainly no assurance that the underbidder will still be interested, but with the information that we have (that he bid that much on the item previously) it's not an unlikely scenario. <br /><br />2) It seems more likely that 1 person could go crazy high for a card then 2 people. Setting the market by 1 person means there is an increased likelihood that the price paid was "silly." By "silly" I mean that circumstances caused a bidder to bid incredibly high. An example of "silly" is where the bidder places a crazy high bid because he must have the card in the next 2 weeks and none other are available. If it's set by what two people are willing to pay, it's much less likely that it's a "silly" price. Certainly it is still possible, but much less likely and I hope you would agree that "silly" prices should not be used at to determine market since it's incredibly unlikely that such conditions would present themselves again in the future. While we don't have knowledge that a "silly" bid was placed, I'd prefer to set market in a way that would significantly eliminate the possibility of it impacting price. <br /><br />If we could eliminate all silly bids up front and had an unlimited supply of bidders and items, then I would agree with you. But I would propose that real-world markets for rare items need to be set differently. <br /><br /><br />Again, I want to re-iterate that even if I thought market should be set by what only 1 person is willing to pay, I would still think shill bidding is fraud and wrong. You raised an interesting point on what sets market and I am interested in hearing other opinions on it.<br /><br />

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Posted By: <b>Steve</b><p>I can't believe that some here are in favor of shilling.<br /><br />Steve

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Posted By: <b>CoreyRS.hanus</b><p>Somehow I have a hard time believing that fraud can produce either true market value or market efficiency.<br><br>

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Posted By: <b>T206Collector</b><p>...in favor of shill bidding, and please don't confuse argument about the market implications of shill bidding as being in support. It's like that old cross examination joke: "So, T206Collector, how old were you when you decided to become a shiller?" Never have -- I understand that it is illegal, and I <br />agree that it should be considered fraud if not reported as a condition of or legitimate possibility during an auction. <br /><br />That said, I finally got a market-based response that one high bidder doth not a market make, and in that I think is a very good argument that true value is what more than one irrational or "silly" actor is willing to pay for a scarce item.<br /><br />Edited to add "il" to "legal"<br /><br />

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Posted By: <b>Chris Nerat</b><p>I actually think that shill bidding, on eBay at least, could be partially prevented if its reserve prices weren't so high.<br /><br />Here is a blog entry I did on this subject a few weeks ago:<br /><br /><a href="http://gavelchat.sportscollectorsdigest.com/I+Hate+EBay+Reserves++100+Bucks+To+Anyone+Who+Can+ Change+My+Opinion.aspx" target="_new" rel="nofollow">http://gavelchat.sportscollectorsdigest.com/I+Hate+EBay+Reserves++100+Bucks+To+Anyone+Who+Can+ Change+My+Opinion.aspx</a>

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Posted By: <b>pas</b><p>But isn't market value best defined as the price on which a willing buyer and willing seller agree? So if I am willing to pay 3000 for a card, and I am shilled up to 3000, and I would have won the card for only 2500 absent shilling, why is 2500 a more "accurate" measure of market value?<br /><br />EDITED TO ADD In a market where the goods are not fungible, I would argue that the outlying buyer DOES define market value, even if he is the only one willing to go that high.

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Posted By: <b>davidcycleback</b><p>There's no question and can be no serious debate that there's material and concrete deception involved in eBay shilling, in that there is material difference between the way the bidding was run and the way bidding rules were stated (eBay rules stating the auction forbids shilling, plus the seller not stating he would be shilling). There can be no debate that the seller broke the stated rules for the auction, and if the bidders had been told shilling would be allowed they would not have placed bids. At the very least, the bidders would would not have placed the max bid they were shilled up to. <br /><br />If the above case was brought to small claims court and shilling was legal, the auction winner would still receive a refund as the seller broke the stated rules for the auction. The judge would say the auction winner was deceived out of money by the seller's covert breaking of the rules. The judge would understand and appreciate that the winner would have bid differently, if at all, if he had been informed how the auction was going to really be run.<br /><br />Whatever one's pro-shilling arguments are, if you tell a bidder there is no shilling then shill them, you've deceived him. If this bidder can prove you broke the stated auction rules by shilling up the price, he'll win his money back about every time in court. It's not just a matter of shilling being legal or illegal, but that you broke the stated rules of the auction. <br /><br />And if you auction on eBay, all of your auctions have explicit rules that state the seller does not shill.

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Posted By: <b>CoreyRS.hanus</b><p>"But isn't market value best defined as the price on which a willing buyer and willing seller agree? So if I am willing to pay 3000 for a card, and I am shilled up to 3000, and I would have won the card for only 2500 absent shilling, why is 2500 a more "accurate" measure of market value?"<br /><br />From my understanding of economics, "accuracy" (in my parlance--"efficiency") is based on all willing parties having accurate and complete information. So in the example you give IF the buyer knows the next highest bidder/buyer is one increment below 2500 and the seller would be willing to sell it at 2500, then market value is 2500. Or, to phrase it another way, IMO no economist will define market value as determined by fraudulent conduct. In the example you give, yes the person might be willing to pay 3000, but he is a buyer at greater than market value. <br /><br />

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Posted By: <b>pas</b><p>the seller is not willing to sell for 2500<br />that's why he shilled it up

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Posted By: <b>leon</b><p>By definition a fair market value can't be set by fraud. As Corey stated way better than I can, (though I did at least take economics <img src="/images/happy.gif" height=14 width=14>) what someone is willing to pay isn't necessarily market value, especially when the market is set by shilling/fraud.....or something like that..

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Posted By: <b>davidcycleback</b><p>As already noted, if the bidder knew he was going to be shilled he would not have placed the $3,000 max bid. He placed the $3,000 ONLY under the assumption there would be no shilling. Thus, the seller saying there is no shilling in order to trick people into placing max bids that he then shills up makes the final price invalid. The final price was formed through trickery and deception. In fact, if the bidders knew there was going to be shilling, they would not have participated and the final realized price would be $0 due to 0 bids.<br /><br />Remember, it's an auction not a sale. In a sale, the buyer and seller can mutually agree upon a price. They can haggle and go back and forth in determining the price. In this haggling, the seller might fairly figure out the most the buyer is willing to pay and get that price. In an auction, however, the competing bidders determine the price and the seller is not allowed to participate. If an eBay seller doesn't like the competing bidders format, if he feels auctions won't maximize his profits, he can have a straight sale. eBay has Buy it Now and Make An Offer options.

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Posted By: <b>T206Collector</b><p>...again that shilling is fraud, it makes my hair scream. Nobody is debating that. Here, I'll say it again -- shilling is fraud. And it is illegal. That is not the point.<br /><br />I most certainly disagree with the statement that market value is based on complete information. That's totally ridiculous. Who ever has complete information? Some people have more information than others. Shilling is not bad because of a lack of information. Shilling is bad because of fraudulent/misleading information -- there is a difference.<br /><br />Finally, do people really bid on auctions based on what their competitors are bidding? "Well, I was only going to bid $50, but since JediMindTrick105@aol.com is bidding $75, then it must be worth at least $80, so I'll bid $80." Who does that?<br /><br /><br><br>_ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ _ <br /><br />Visit <a href="http://www.t206collector.com" target="_new" rel="nofollow">http://www.t206collector.com</a> for signed deadball card galleries, articles and more!

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Posted By: <b>CoreyRS.hanus</b><p>"I most certainly disagree with the statement that market value is based on complete information. That's totally ridiculous. Who ever has complete information? Some people have more information than others. Shilling is not bad because of a lack of information. Shilling is bad because of fraudulent/misleading information -- there is a difference."<br /><br />When parties to a transaction have unequal information you have market inefficiencies. That allows a party to earn abnormally high returns (e.g., buying something at too low a price or selling something at too high a price). Others then will notice that and be willing to either buy or sell, as the case may be, at greater or lower a price, thus causing the market price to readjust. So therefore any market price determined by unequal information is not an equilibrium price.<br /><br />Also, in my opinion when a party is unable to know information is fraudulent/misleading, that party is then characterized as having a lack of information. So I believe it is accurate to say shilling is bad because of a lack of information. <br /><br />Finally, Peter, I thought from your example the seller WAS willing to sell at 2500 and only shilled it up because he felt the buyer would pay more than that if he felt he had to. As has been said in both this thread and many times previously in others, a bidder's decision how high to bid is based in part on his perception how other bidders value the item. So to the extent he is given misleading information (i.e., shilling), his valuation is meaningless. <br /><br />

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Posted By: <b>Eric Brehm</b><p>One does not have to dig very deep into economic theory to see that shill bidding is not 'fair'.<br /><br />Fair market value = "the price at which property would change hands between a buyer and seller when both have reasonable knowledge of all the necessary facts and neither has to buy or sell."<br /><br />If I was the author of a baseball card price guide, and I was omniscient with respect to the facts surrounding every sale that had taken place within the time period at hand, among the transactions that I would exclude in deriving market values would be:<br /><br />(a) a collection that is offered to a dealer by someone who has no idea what the collection is worth, and is purchased for a small fraction of what the cards typically sell for;<br /><br />(b) an auction in which shill bidding is employed and influences the highest bid;<br /><br />(c) a sale where the price is obtained through extortion.

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Posted By: <b>T206Collector</b><p>And I don't really dispute many of these points. For me it comes down to a buyer making a voluntary decision to place a bid for whatever reason he chooses. If I was willing to pay $500 for a card that got shilled from $100 to $495, the only reason I would return the card if I later found out about the shilling was if I thought I must have made an error in my initial evaluation. But even there, the mistake was in the initial evaluation, not the bidding war.<br /><br />I do think there is some merit to the point that a shilled auction does not reflect true market value as well as a clean auction, since multiple bidders show a more accurate price than just one silly bidder at the top. In that way, shilling rewards irrational bidders and can thus create a fake market.<br /><br><br>_ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ <u> </u> _ _ <br /><br />Visit <a href="http://www.t206collector.com" target="_new" rel="nofollow">http://www.t206collector.com</a> for signed deadball card galleries, articles and more!

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Posted By: <b>Peter_Spaeth</b><p>Then Paul by that logic straight sales or BINs also don't reflect market value necessarily, because we don't know if the buyer was just the one wacko willing to pay that price or not. Should we exclude all those transactions as well from a determination of market value, whatever that now means?

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Posted By: <b>Matt</b><p>Peter - I would suggest that those sales should not be eliminated from consideration, but they certainly should be weighted less then what a card brings in at an open auction.

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Posted By: <b>Eric Brehm</b><p>Well, open auctions can get pretty wacky too, such as when two or more bidders with virtually unlimited resources are in 'must have' mode.<br /><br />I suppose I would be immune to shill bidding if I could put an absolute value on a sports collectible item, completely independent of what it is worth or might be worth to anyone else. I just don't see how that's possible.

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Posted By: <b>Matt</b><p>Eric - as you say nothing can completely eliminate the silliness but an open auction would need 2 silly people to be involved which is much less likely then a straight sale which only needs 1.

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Posted By: <b>Eric Brehm</b><p>Matt - good point. I tend to pay more attention to the regular auctions on eBay, than to the BIN results, when assessing values.

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Posted By: <b>CoreyRS.hanus</b><p>Market price reflects what an item would fetch on the "market". The market to me is that universe of buyers or sellers of such an item, who have access to each other and the same information about the item, and who are aware what each is willing to buy or sell the item for. The market is not a private transaction between two people oblivious to what others would buy/sell the item for. To the extent you have such a private transaction, what price the item goes for reflects the particularities of that particular buyer and seller, which can have little relation to how the market would value the item. <br /><br />In regard to BIN transactions, they differ from shilled transactions in one very important way -- the buyer is not being mislead by fraudulent information that there are ready, willing and able buyers at the shilled bidding increments below the price at which the shiller is prepared to let the item sell at.<br /><br />

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Posted By: <b>davidcycleback</b><p>What are the rules of the game, and are both sides following the rules of the game-- those are two essential questions. If one side is following the rules of the game, and the other side is secretly breaking them for financial game, it's not a fair contest and the result is at the least unreliable. If a boxer taped his hands with plaster, most boxing enthusiasts would say the match result was invalid. If a poker player snuck in a sixth card, most would say his win should be voided. And if a seller is secretly placing shill bids against the stated rules, most would say the final price is invalid.<br /><br />In any game, if one side follows the rules and the other breaks them for material effect, the final score is considered invalid. Most will say the game and score doesn't count, the game is null and void. <br /><br />If you force one side in a game, any game, to follow the rules and allow the other side to break any rule he wants, you'd be a fool to consider the final score seriously. 9+ times out of 10 the latter person will win, because the game is fixed to his advantage.<br /><br /><br />It should also be noted that most people consider fair market value to be what they would get if they tried to sell it on the open market. Assuming these people are going to follow the laws of the land, a past sell price inflated by illegal activity would not be considered an indication of fair market value. <br /><br />I would think that it would be obvious to most people that a sale price obtained by illegal means is neither valid nor, more important, a reliable indication of the fair market. Law abiding sellers shouldn't use that price as indication of what they'd get on the open market, because they will get substantially less. Sure, a seller might be able to get $50 for a 1987 Topp Chuck Crim by threatening to beat up the collector, but, for the dealers and collectors who don't threaten to beat up their customers, the market value is about two cents. <br /><br />As is often said, a card is worth to you what you can sell it for. If a Barry Halper Auction or chat-board-theorized price is not what you can get for your card, it's not what your card is worth to you. $150, $76 and $2,750 are pretty numbers indeed, but if you can only get $48 the card is worth $48. <br /><br />I feel that some of these "Market Value" prices theorized in this thread are not market prices, as no law abiding seller would obtain the prices. If no selling Net54 board member would receive at eBay auction or sale $3,000 for that card, the market value for the card is not $3,000. Realized, not theorized, prices feed the bull dog. Bull dogs don't eat woulda coulda shoulda.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Steve</b><p>In any game, if one side follows the rules and the other breaks them for material effect, the final score is considered invalid. Most will say the game and score doesn't count, the game is null and void.<br /><br /><br />Too bad that didn't happen to the Patriots and all those Super Bowls they cheated to win.<br /><br /><img src="/images/wink.gif" height=14 width=14><br /><br />Steve

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Eric Brehm</b><p>Interesting discussion ... the best I've seen at getting to the heart of the matter. I just hope that if it is going on in the sports memorabilia world (and many seem to feel strongly that it is), that someone gets busted for it one of these days; that might serve as a deterrent for others engaging in the practice.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>boxingcardman</b><p>It is expressly forbidden in CA by Civil Code 1812.608(h):<br /><br />1812.608. In addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of the following:<br />h) Cause or allow any person to bid at a sale for the sole purpose of increasing the bid on any item or items being sold by the auctioneer, except as authorized by Section 2328 of the Commercial<br />Code or by this title. A violation of this subdivision includes, but is not limited to, either of the following:<br /> (1) Stating any increased bid greater than that offered by the last highest bidder when, in fact, no person has made such a bid.<br /> (2) Allowing the owner, consignor, or agent thereof, of any item or items to bid on the item or items, without disclosing to the audience that the owner, consignor, or agent thereof has reserved the right to so bid.<br /> A violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100).<br /><br />With a penalty of $100, of course, the sanction is laughable but presumably a conviction on this basis would result in a civil lawsuit with a punitive damages claim. <br /><br /><br><br>Sic Gorgiamus Allos Subjectatos Nunc

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Matt</b><p>Adam - I had to take the website's word for it when I quoted above, but is it also covered by the 2006 Fraud Act?

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Peter_Spaeth</b><p>The same state that forbids altering cards by statute, if memory serves. <img src="/images/happy.gif" height=14 width=14>

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>davidcycleback</b><p>I guess if California starts busting people for shilling, the values of our cards will get a retroactive "market adjustment." Or maybe the price guides will simply add asterisks.<br /><br />Actually, since some people say market value is determine by how much the seller gets from the buyer no matter what the circumstances, the value of that shilled "$3,000" card evidently would turn out to be -$250. After the fine, legal fees and civil settlement, that's how much the seller realized from the sale of the card. <br /><br />Going on past sale results, perhaps someday Beckett will list the value of a card as "20 days community service and loss of eBay privileges." Perhaps another value will be listed as "Knee to the groin from irate buyer."

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Red</b><p>It's a never ending battle. Sellers shilling to keep prices up, and buyers in collusion to keep prices down. Both equally talented at each other's tricks, and the poor auction house in the middle getting blamed for it all.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Eric Brehm</b><p>Well if the auction house itself is the one doing the shill bidding, they certainly are to blame. Especially if they are bidding on items that they themselves own, so they have nothing to lose except perhaps a delay in finding buyers by some other means, if nobody tops their in-house bids. If they are bidding on items consigned to them, they are still potentially in a position to make a reasonable profit, since the 10% or so extra they have to pay the consignor when they raise the highest legitimate bid is less than the 15% to 20% buyer's premium that the high bidder was willing to pay.<br /><br />Buyer collusion: how does this actually work? Say Buyer A and Buyer B both want Card 1 and Card 2 for their collections. But they agree that Buyer A will only bid on Card 1, and Buyer B only on Card 2. So Buyer A forfeits the opportunity to buy Card 2, but gets a better price on Card 1 in return, since Buyer B is not bidding against him. Is that it? I know this has been discussed here before, as to whether this sort of agreement is ethical or even legal, but I can't remember what the conclusion was.