the list (of criminals) is revealed

Eric72 · #1 01-30-2016, 07:43 AM

Quote:

Originally Posted by scooter729

Curious as to what people would think of this hypothetical situation, if it were possible for it to happen....

Two friends (A and B) both are interested in an item that doesn't pop up often, but typically would sell for around $500. But since it doesn't come up for sale often, both are willing to pay $1,000+.

In talking, they both realize they are likely going to bid each other up on the item, so they come to an agreement to have Friend B stay away from bidding on this item and let A get it for ~$500, and B will be able to get the next one that comes available for ~$500.

Is this scenario wrong? Seems like the buyer's version of shilling - wouldn't be illegal but is it ethical?

Hi Scooter. You pose an interesting question. Please know that my answer is not an attack, snarky response, or anything of the sort. I am just joining in the conversation.

As it pertains to the scenario above, wouldn't this be an example of bidder collusion? I very well could be mistaken; however, think the practice actually is illegal. At the very least, it artificially suppresses the price of the item. It could likely also be argued that the consignor suffered economic harm because of the bidders' agreement.

For the purpose of full disclosure, I never participated in Mastro auctions.

Best regards to all. Happy collecting.

Peter_Spaeth · #2 01-30-2016, 07:55 AM

Quote:

Originally Posted by Eric72

Hi Scooter. You pose an interesting question. Please know that my answer is not an attack, snarky response, or anything of the sort. I am just joining in the conversation.

As it pertains to the scenario above, wouldn't this be an example of bidder collusion? I very well could be mistaken; however, think the practice actually is illegal. At the very least, it artificially suppresses the price of the item. It could likely also be argued that the consignor suffered economic harm because of the bidders' agreement.

For the purpose of full disclosure, I never participated in Mastro auctions.

Best regards to all. Happy collecting.

Eric in theory you are right, buyers cannot lawfully collude to suppress price any more than sellers can collude to inflate it. Basic antitrust law. Of course, as a practical matter, it's going to be viewed as less important than seller price-fixing.

swarmee · #3 01-30-2016, 07:58 AM

Quote:

Originally Posted by Peter_Spaeth

Eric in theory you are right, buyers cannot lawfully collude to suppress price any more than sellers can collude to inflate it. Basic antitrust law. Of course, as a practical matter, it's going to be viewed as less important than seller price-fixing.

And almost impossible to prove, since they're not going to discuss their lack of additional bids with anyone else, including the auctionhouse...

Peter_Spaeth · #4 01-30-2016, 08:01 AM

Quote:

Originally Posted by swarmee

And almost impossible to prove, since they're not going to discuss their lack of additional bids with anyone else, including the auctionhouse...

Yes, but that can be true of seller collusion as well, sometimes there are smoking guns but often it has to be proved circumstantially.

T206Collector · #5 01-30-2016, 08:07 AM

On day 1, Zues created auction houses.
On day 2, Hades created shill bidding.

If you participate in bidding at auctions against strangers then shill bidding in one form or another is a significant and predictable risk. Too easy to call a friend and have him place a bid for you. It's unethical and illegal. But, very hard to police. So I accept it as a hobby hazard.

Having said that, once in awhile the rock is lifted, the sun shines on the mud beneath and the bugs scatter. And we can see you all very clearly now. You were betting we wouldn't ever see you. Oops.

steve B · #6 01-30-2016, 04:05 PM

Quote:

Originally Posted by Peter_Spaeth

Eric in theory you are right, buyers cannot lawfully collude to suppress price any more than sellers can collude to inflate it. Basic antitrust law. Of course, as a practical matter, it's going to be viewed as less important than seller price-fixing.

Unless of course you're part of a group of stamp dealers that colluded over large lots offered at auction over several years AND were dumb enough to put the agreements in emails and/or written letters. Then fired an employee who wrote many of the emails and letters and who delivered copies to the authorities after his firing.

Yes, that actually happened and a number of people got into a lot of trouble.
http://www.ag.ny.gov/press-release/s...stamp-auctions

Done verbally between friends it's probably way too hard to prove in most cases.

I did however see it caught at a live auction. One bidder in the front row turned to his competition and said "let me have this one and you can have the next" Right within hearing of the auctioneer.

The auctioneer stopped the auction, gave them a stern warning that he could lose his license and they could be arrested and that if they wanted to make deals they should do it outside before bidding. The the item was restarted at the former high bid with the offender getting credited for the next advance which he never made. The third bidder came in then, and got a quick thank you and the lot eventually sold for around $40 more.

Steve Birmingham

pgellis · #7 01-30-2016, 04:42 PM

So, let me get this correct:

- Auction house owners don't want to have open reserves because it will look bad and hurt future business if any/many lots go unsold. So how does going to prison look for future business ventures?

- As for consignors, if I am to believe that they actually paid the BP for any of their items that they ended up being the high bidder on, how can it be a good business decision to pay 20% BP on your own item instead of letting it go for a little less than you had invested into it? I know it depends on which is greater, the BP or the loss? But if you "bought" your own item back, you still have it and have to try to sell it again later.

- For those caught this time, but only once, really? This is just the data for a single AH over just a 3 year period. Imagine if it were opened up to all AHs for the past 10-15 years? Just this once? Just like the drunk driver that was caught and he says, "this was the only time I drove drunk". Yeah right.

- Can you imagine what it would look like if you could get this type of information for eBay

keithsky · #8 01-30-2016, 04:56 PM

With over 500 posts it's really clear to see that this stuff affects us all about getting ripped off. My opinion as far as the ones on the list from PSA coming on here and voicing there opinion on why they are on the list is slim to none. Anytime anything has come up involving PSA or JSA on anything I have never seen anyone come on and defend themselves. Which shows me they either don't care what people say on here as long as they are raking in money or they just think we are just a bunch or winers and it's not worth there time. Just my opinion. I have read 90% of the posts so if I missed one of them coming on then I appologize.

Peter_Spaeth · #9 01-30-2016, 05:46 PM

Quote:

Originally Posted by steve B

Unless of course you're part of a group of stamp dealers that colluded over large lots offered at auction over several years AND were dumb enough to put the agreements in emails and/or written letters. Then fired an employee who wrote many of the emails and letters and who delivered copies to the authorities after his firing.

Yes, that actually happened and a number of people got into a lot of trouble.
http://www.ag.ny.gov/press-release/s...stamp-auctions

Done verbally between friends it's probably way too hard to prove in most cases.

I did however see it caught at a live auction. One bidder in the front row turned to his competition and said "let me have this one and you can have the next" Right within hearing of the auctioneer.

The auctioneer stopped the auction, gave them a stern warning that he could lose his license and they could be arrested and that if they wanted to make deals they should do it outside before bidding. The the item was restarted at the former high bid with the offender getting credited for the next advance which he never made. The third bidder came in then, and got a quick thank you and the lot eventually sold for around $40 more.

Steve Birmingham

Right. There is some other prominent example too that I cannot think of. PS I have actually seen an email from a prominent collector to several other collectors who were bidding on similar items looking to allocate certain cards in an upcoming auction so they would not bid against each other. It probably happens with some degree of regularity.

slidekellyslide · #10 01-30-2016, 06:41 PM

Quote:

Originally Posted by Peter_Spaeth

Right. There is some other prominent example too that I cannot think of. PS I have actually seen an email from a prominent collector to several other collectors who were bidding on similar items looking to allocate certain cards in an upcoming auction so they would not bid against each other. It probably happens with some degree of regularity.

When I see one of those "Let's share an auction lot" posts on Net54 I feel like that also falls under collusion.

ullmandds · #11 01-30-2016, 06:43 PM

Quote:

Originally Posted by slidekellyslide

When I see one of those "Let's share an auction lot" posts on Net54 I feel like that also falls under collusion.

i always kinda felt that way too...although it'd be a lot easier if u just wanted a card or two in a big lot!!!!

Peter_Spaeth · #12 01-30-2016, 06:45 PM

Quote:

Originally Posted by ullmandds

i always kinda felt that way too...although it'd be a lot easier if u just wanted a card or two in a big lot!!!!

We've discussed it before, and it's subtle, but there is a difference between pooling resources to win a lot and then divide it up (ok), and colluding not to bid on items at all so that others can win them (not ok). It's like the difference between a buyer's coop and buyers colluding to fix price. You have to look at each set of facts on its own merit.

slidekellyslide · #13 01-30-2016, 06:46 PM

Quote:

Originally Posted by ullmandds

i always kinda felt that way too...although it'd be a lot easier if u just wanted a card or two in a big lot!!!!

I know that's why most do it here, but I think it's close to the line of collusion. Clearly there are a lot of dealers here who would like to buy the whole lot and part it out. Sharing the lot most certainly lowers the pool of interested bidders.

David Atkatz · #14 02-03-2016, 06:36 PM

Quote:

Originally Posted by slidekellyslide

When I see one of those "Let's share an auction lot" posts on Net54 I feel like that also falls under collusion.

I don't agree, Dan. If I only want part of a lot, I'm going to bid knowing that finding a buyer for what I don't want may take some time, and that I may not get near what I need. But if I know beforehand that, effectively, I've got those pieces sold, I most likely will feel free to bid a bit higher. (And that goes for my "partners." Their knowing that they are getting what they want, with the other pieces pre-sold, as it were, enables them to go higher for their particular bit.)

batsballsbases · #15 02-03-2016, 06:42 PM

Quote:

Originally Posted by David Atkatz

I don't agree, Dan. If I only want part of a lot, I'm going to bid knowing that finding a buyer for what I don't want may take some time, and that I may not get near what I need. But if I know beforehand that, effectively, I've got those pieces sold, I most likely will feel free to bid a bit higher. (And that goes for my "partners." Their knowing that they are getting what they want, with the other pieces pre-sold, as it were, enables them to go higher for their particular bit.)

David,
I also dont fell that it falls under collusion. But I always said to myself when someone would post up and say hay lets partner up on this lot. And as we know many AHs look at net 54 all the time and I always said to myself wow what a wonderful way to shill up a lot that you already know has a group of buyers if one wanted to if you get what I mean!!!!!

slidekellyslide · #16 02-03-2016, 07:34 PM

Quote:

Originally Posted by David Atkatz

I don't agree, Dan. If I only want part of a lot, I'm going to bid knowing that finding a buyer for what I don't want may take some time, and that I may not get near what I need. But if I know beforehand that, effectively, I've got those pieces sold, I most likely will feel free to bid a bit higher. (And that goes for my "partners." Their knowing that they are getting what they want, with the other pieces pre-sold, as it were, enables them to go higher for their particular bit.)

There was a thread on here early last year which was started by the same Net54 member who started this thread in which he and another bidder agreed to partner up on a lot of rare Topps Hocus Focus cards. The lot sold for $10,000 and there was poor communication between the two partners and the division of the lot did not happen right away. This of course angered the guy who sat out of the bidding and he stated that he would have gone $20,000 on the lot. It all worked out in the end as one guy went on an extended vacation. But the point of all of this is that those two guys getting together on that lot clearly worked in their favor to keep the price down.

Does it always work that way? No, and I have no statistics to show which outcome is more prevalent. I understand why people do it on lots though, it has to be frustrating to see the one card you've been pining for in a lot of stuff that you don't want or need.

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