Shill bidding

notwilight · November 18, 2006 11:25PM

Suppose Russ or Coinguy1 put a coin on ebay. I'm not really interested in it but I know the coin is a $5000 coin. It sits there a few days at a few hundred dollars. So I say, heck I'll bump it up. I'd pay $4000 for that coin even though it's not my set. So I put in a $4000 bet. I'm eager and willing to buy the coin at a 20% discount so I am indeed a buyer. But I wouldn't have even been there if I hadn't known the seller and felt he was a good guy and wanted to see him do well.

Would your opinion change if it were a close friend of mine selling collectable art that I am not interested in at all but bid in a similar manner?

--Jerry

jayboxx · November 18, 2006 11:32PM

If you are just bidding to bump someone's item with no interest in the article, I would consider that a shill bid. (Edit: Actually, Coinguy1 had a good point about the fact there is no collusion...I still think it is fishy though)

I think the first example is reasonable, when is Coinguy1 putting some coins on ebay?

coinguy1 · November 18, 2006 11:34PM

Jerry, in my view, what you described is not shilling. There was no discussion/communication, joint effort or agreement between the seller (who was unaware of your participation) and the bidder, and you intended to honor your bid.

Perhaps equally importantly, you bid at a level that were "eager and willing to buy the coin" at. It is immaterial that you happened to know and be friendly with the seller.

VamGuy · November 18, 2006 11:36PM

It has been discussed on this board recently, that the difference between AT & NT is intent.

The same determining factor can be used in these two examples. Your intent is not to own the coin. And your intent is not to buy the coin at a 20% discount, although you might enjoy that. Your intent is to help a "good guy", or a buddy out. That's the exact definition of a shill. This is further confirmed by your statement...

<< But I wouldn't have even been there if I hadn't known the seller and felt he was a good guy and wanted to see him do well. >>

In the second example, your intent is not to own the art, your intent is not to buy the art at a 20% discount. You intent is to help a buddy out. That's the exact definition of a shill.

Either way you "justify" your actions, in these two examples, you're a shill.

RYK · November 18, 2006 11:36PM

<< Jerry, in my view, what you described is not shilling. There was no discussion/communication, joint effort or agreement between the seller (who was unaware of your participation) and the bidder, and you intended to honor your bid.

Perhaps equally importantly, you bid at a level that were "eager and willing to buy the coin" at. It is immaterial that you happened to know and be friendly with the seller. >>

I agree. If there is no collusion, and you are happy to own the coin at your bid, it is not a shill, no matter how you feel about the seller.

jayboxx · November 18, 2006 11:39PM

RYK and Mark, what about the 2nd example he gave?

coinguy1 · November 18, 2006 11:46PM

<< RYK and Mark, what about the 2nd example he gave? >>

Sorry, I had missed the second example. It is more difficult for me, but.....as long as there was no knowledge on the part of the seller or agreement between the parties and the bidder intended to honor his bid, I don't think it qualifies as shilling. There was still no collusion involved. I can see where others might disagree, however.

RYK · November 18, 2006 11:51PM

<< RYK and Mark, what about the 2nd example he gave? >>

If you are not that interested in the art, and you make a bid 20% less than the FMV of the work, so long as you (and your wife

) are willing to buy the art if your bid is the winner, I do not consider that to be shilling.

seateddime · November 18, 2006 11:54PM

I have seen a set of dimes offered where 1 guy who had bid on a dime every bid on 30 and all from the same seller, that's bad

notwilight · November 19, 2006 12:26AM

Ok, let's expand a little. The seller had listed the item tastefully on the BST board. The post hadn't been bumped in 36 hours. So I reply, "I placed a bid to get you going" or something like that. Is it starting to sound a little less innocent?

I believe it is innocent but I'm starting to worry a little about appearances.

--Jerry

bhartman35 · November 19, 2006 1:10AM

<< Suppose Russ or Coinguy1 put a coin on ebay. I'm not really interested in it but I know the coin is a $5000 coin. It sits there a few days at a few hundred dollars. So I say, heck I'll bump it up. I'd pay $4000 for that coin even though it's not my set. So I put in a $4000 bet. I'm eager and willing to buy the coin at a 20% discount so I am indeed a buyer. But I wouldn't have even been there if I hadn't known the seller and felt he was a good guy and wanted to see him do well.

Would your opinion change if it were a close friend of mine selling collectable art that I am not interested in at all but bid in a similar manner?

--Jerry >>

I think we need to be really clear here: The purpose of shill bidding (and the reason it's nominally forbidden on Ebay) is fraud. Shill bidding is when someone bumps up the price of an auction, in collusion with the seller (or sometimes the seller and bidder are one in the same under different usernames). If the seller doesn't know what the bidder is doing, no shilling has occurred. (To my understanding, it's even arguable that no shilling has occurred if both parties know about the bidding, but the buyer actually pays for the item).

In one of my first Ebay auctions, I auctioned off a raw Mercury dime. Unbeknown to me (because I didn't know his username) my stepfather ended up winning the item. He paid me the money (which ended up being less than $5, as I recall), and I gave him the dime. (The only difference between that and a normal auction was I didn't have to ship the item.)

So, IMHO, two elements need to be present in order for shilling to occur:

1) The parties have to be in collusion.
2) The transaction itself has to be bogus.

Even if you know your friend is bidding, and he wins the auction, as long as he pays, it's not shilling. The purpose of shilling is to get a higher price from an unsuspecting bidder.

FullStrike · November 19, 2006 1:16AM

There is no shilling going on from what I read. Now if you won the item and you didn't pay for the item because of a previous agreement with the seller - then there was shill bidding involved. If the seller offers the item to other parties through " second offers' then it really gets serious. He should do hard time.

This sort of thing happens a lot at "real - live auctions ".

BAJJERFAN · November 19, 2006 1:23AM

What about complimentary bids to generate "interest" in an item without necessarily running up the price?

garsmith · November 19, 2006 1:27AM

I in the past have bid on coins that where not in my area of collecting because the coin I saw was way below normal sales price! That is how expanded into U.S. 1$ gold coins and Walking Liberty 1/2's. I wasn't shill bidding I was smart bidding!

Shill bidding is when you using multiple user names bid on your own coins, or when you work out a deal with smoeone to have them bid on your coin with no intention of actually paying for the coin.

19Lyds · November 19, 2006 1:33AM

As long as you intend to honor your $4000 bid, I see nothing wrong with this.

sonoranmonsoon · November 19, 2006 4:09AM

You placed a perfectly honest bid, because you were willing to buy the item at the price you bid. That is not shilling. It does not matter if you are friends with the seller or not.

cullenbryant · November 19, 2006 4:13AM

<< So I put in a $4000 bet. I'm eager and willing to buy the coin at a 20% discount so I am indeed a buyer >>

if you win, you didn't get a 20 percent discount. you paid what it was worth.

BobaFett72 · November 19, 2006 4:17AM

If you colluded to bid, thats fraud. If you are just being a nice guy and are more than willing to pay what you bid, there is no shilling going on.

LindeDad · November 19, 2006 4:30AM

Sounds like a good way to turn a profit. Or maybe the coin really wasn't worth $5000.
And I agree as long as you and the seller are not in the know about the auction it is not shilling. Or as long as Russ is not selling your coins on consignment.

RBinTex · November 19, 2006 4:33AM

What you descrbe is NOT shilling.

ziggy29 · November 19, 2006 4:37AM

I'm with the consensus. If there was no collusion and the bidder fully intends to buy the coins at their bid, then it's not shilling. I can understand how some people would think it doesn't pass the smell test, but I don't see this as a shill.

Shill bidding

Comments

Leave a Comment