I think some of you guys are overstating the impact that shill bidding actually has on the broader market. I hate shill bidders just as much as the next guy, and it obviously costs people more money sometimes, but I disagree with some of the narrative here regarding how much it actually influences market prices overall.
When I determine how much I'm willing to pay for an item, or how much I'm going to sell one for, I base those decisions on how much I predict the next one will sell for, not how much the last one sold for. For high pop count cards, this is pretty simple. I just look at recent sales and throw out any outliers (which I assume most people do). So for a Mike Trout RC, that's not exactly difficult to price. But for something that sells very infrequently, I do more research and I build out regression models and forecasting models that take into account other similar cards. But I'm also a math nerd. But I think most people do something at least somewhat similar that yields directional accuracy even if they lack the necessary skills to build forecasting models. It doesn't take a genius to figure out that if the last 10 sales of the card you want to buy are $100, $105, $97, $108, $110, $94, $27, $102, $101, and $278, that something abnormal happened with the $27 and $278 sales and to discard them as outliers. The $278 was probably shill bid or a fake sale, or someone thought it was a refractor when it wasn't, something like that which makes it an outlier. Some disingenuous sellers might try to point to the $278 saying, "the most recent sale was $278", but people aren't stupid. Any statistical model worth its salt is going to predict the hammer price on the next one to be about $100 +/- $5 or so. The sale that was shill bid up to $278 is going to have almost no effect on the market as a whole. That doesn't mean that all shilling has no effect. Surely it can and does, but for the most part these sales are outliers and people know to discard them.
I think there is a disconnect though regarding the extent to which people think shill bidding occurs and the extent to which it actually occurs, or rather the extent to which it actually affects the outcome of a sale. The vast majority of sales are not affected by shill bidding. Even with the consignment companies like PWCC and Probstein. Sure, there's no shortage of consignors who shill those auctions, but not nearly as often as most people seem to think. I've consigned probably 1,000 cards or so over the past 2 years and I could probably count on one hand the number that had to be relisted for non-payment. Granted, I don't shill my auctions, so it's not a representative sample of the entire consignment market, but it does shed light on how small at least part of the problem is.
I think most people who shill bid on their consignments probably treat it similar to a 'reserve' price because they don't want their card to sell for less than its true market value, which as others have pointed out above, can often happen with auctions. Believe it or not, Probstein sales are flooded with examples of cards that sell well below market (as well as many that sell at or above market). When he has multiple examples of the same card (say 12 Zion Williamson PSA 10 Prizm RCs) he often lists them all to end at the exact same time. This is a terrible selling strategy because it often forces buyers to choose which one they want to try to win rather than giving them a shot at all of them. I remember last year wanting to buy a card that he had 8 of, all ending at the same time. It was a fairly common card with a well-defined market value of around $300 at the time. Knowing I could probably get one below market because he had listed them with this strategy, I decided to place a bid of $250 on all of them in hopes that I might get at least one at a bargain. I ended up winning 6 of the 8 lol. The next week, that same card was back to selling for $300 again.
As far as market impact goes, a shill bid has no market effect unless it succeeds in getting a buyer to pay above market prices for something. If the last 4 sales of a card were for $100, $110, $95 and $105, and the next one receives a $90 shill bid placed on it, it's not going to impact the overall market at all. It just serves as a 'reserve price' on the item. If someone shill bids $150 for it, they will almost always just end up "winning" that auction instead (usually at a market price bid of ~$100-110). Very rarely do they succeed in getting someone to pay $150 for a $100 card. And even if they do, again, the market generally recognizes this sale as the outlier it is and discards it when making future purchasing decisions.
The idea that the entire market is somehow pumped up by these outliers or that even the majority of PWCC sales are artificially inflated simply is not true. Probably over 98% of PWCC/Probstein auctions get paid for. The primary reason PWCC gets higher prices for their cards is because they have more eyes on the listings. It's not because of shill bidding.
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