New lawsuit accuses PWCC of massive shill bidding

[perezfan]

Originally Posted by Peter_Spaeth

Agreed, but for me, mostly for other reasons.

Same here (snip snip).

[edhans]

I've never completely bought into the argument that shill bidding affects market values. Obviously if a lot is won by a consignor or someone acting on his behalf, that does artificially inflate the market value (comps) of the card(s) in that lot.

But if the lot is won by a buyer not connected to the auction house or consignor, can we really argue that the value is artificially inflated? Other than the public reporting, how is that transaction different than a buyer negotiating and purchasing the item from a dealer at a show? There is an independent buyer and seller who have agreed to a price. Does that not establish a market price? Why do we need a third party (the underbidder) to establish a market?

[Leon]

Originally Posted by edhans

I've never completely bought into the argument that shill bidding affects market values. Obviously if a lot is won by a consignor or someone acting on his behalf, that does artificially inflate the market value (comps) of the card(s) in that lot.

But if the lot is won by a buyer not connected to the auction house or consignor, can we really argue that the value is artificially inflated? Other than the public reporting, how is that transaction different than a buyer negotiating and purchasing the item from a dealer at a show? There is an independent buyer and seller who have agreed to a price. Does that not establish a market price? Why do we need a third party (the underbidder) to establish a market?

As John Burke once told me, the most uderrated bidder for auctioneers is the underbidder.

Also, if someone does a comp on one of my cards, I laugh. I generally don't sell average cards and get higher prices than average "comps".
.

[Peter_Spaeth]

Originally Posted by edhans

I've never completely bought into the argument that shill bidding affects market values. Obviously if a lot is won by a consignor or someone acting on his behalf, that does artificially inflate the market value (comps) of the card(s) in that lot.

But if the lot is won by a buyer not connected to the auction house or consignor, can we really argue that the value is artificially inflated? Other than the public reporting, how is that transaction different than a buyer negotiating and purchasing the item from a dealer at a show? There is an independent buyer and seller who have agreed to a price. Does that not establish a market price? Why do we need a third party (the underbidder) to establish a market?

Perhaps I am misunderstanding the point but I don't follow. If but for shill bids I would have won a card for (say) 1000, but because of a shill bid at 1100 I was pushed to 1200, how is that not artificially inflated?

[ullmandds]

Originally Posted by Peter_Spaeth

Perhaps I am misunderstanding the point but I don't follow. If but for shill bids I would have won a card for (say) 1000, but because of a shill bid at 1100 I was pushed to 1200, how is that not artificially inflated?

I think ed's point is that the ultimate high bidder was "willing" to pay a higher price therefore it should not be "" inflated. I disagree with this sentiment.

[Peter_Spaeth]

Originally Posted by ullmandds

I think ed's point is that the ultimate high bidder was "willing" to pay a higher price therefore it should not be "" inflated. I disagree with this sentiment.

Right. Where the price of a stock is inflated because the issuer withheld material information, people are still "willing" to pay the inflated price, but that does not negate fraud. It is a non sequitur IMO.

[dbussell12]

Originally Posted by Peter_Spaeth

Right. Where the price of a stock is inflated because the issuer withheld material information, people are still "willing" to pay the inflated price, but that does not negate fraud. It is a non sequitur IMO.

again, correct. market manipulation is an objective fact. non-correlative with the subjective decision by any individual buyer to participate in said market after the fact. entirely different discussion

[edhans]

My main point is that a willing buyer and a willing seller should be sufficient to establish a "market value". We shouldn't require validation in the form of a third party underbidder. I don't think the presence of shill bids creates imperfect information. That is, it doesn't change what the buyer is willing to pay. On the flip side, we may conclude that some values presented in price trackers are deflated, since the buyer may have gone even higher, but didn't need to since there was no underbidder.

I do hope everyone understands that I do not condoning shill bidding. Just pointing out that its effect on "market value" may be somewhat overstated.

[dbussell12]

Originally Posted by Peter_Spaeth

Perhaps I am misunderstanding the point but I don't follow. If but for shill bids I would have won a card for (say) 1000, but because of a shill bid at 1100 I was pushed to 1200, how is that not artificially inflated?

yes. value is subjective, markets are objective. individuals pull from market data to correlate perceived subjective value with mass objective value and attempt to deduce best paths forward (ie 'does how i value this card correlate with how others value this card? + if so/not, how do i proceed accordingly?). if the market perception of a card value is inflated by bid pumping and does not accurately reflect 'real data' (ie real buyers) -- that is artificial inflation of market value; skews market data for a buyer's interfacing w/ subjective valuation vs market.

[jayshum]

Originally Posted by edhans

I've never completely bought into the argument that shill bidding affects market values. Obviously if a lot is won by a consignor or someone acting on his behalf, that does artificially inflate the market value (comps) of the card(s) in that lot.

But if the lot is won by a buyer not connected to the auction house or consignor, can we really argue that the value is artificially inflated? Other than the public reporting, how is that transaction different than a buyer negotiating and purchasing the item from a dealer at a show? There is an independent buyer and seller who have agreed to a price. Does that not establish a market price? Why do we need a third party (the underbidder) to establish a market?

How do you tell the difference when looking at past sales for comps? You can't which is why shill bidding increases the supposed market value of a card.