revisiting the issue of shill bids
lava
Posts: 3,286 ✭✭✭
A while back someone asked about shill bidding, noticing an uncanny coincidence that a large number of coins hover one bid away from the reserve. I discounted it at the time. After seeing this over and over again, I am starting to wonder. Anyone else want to speculate on this?
I brake for ear bars.
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I decide the max I am willing to pay, put my bid in with seconds to go and I win or I don't.
No worries.
Joe.
of course, shilling occurs at some live auctions too...
K S
<< <i>For me there is nothing to speculate about. I don't care if there is shill bidding or not.
I decide the max I am willing to pay, put my bid in with seconds to go and I win or I don't.
No worries.
But there *is* something to speculate about. If you snipe $100 on a particular coin, the shill bidding might be the difference between getting the coin at $75 and getting it at $95.
In either case, yes, you got the coin at a price you were willing to pay so you should be reasonably happy -- but you're still paying more than you should have needed to pay.
I believe that when a reserve has been placed by a consignor, Heritage merely sets the bid at one increment below the reserve. That way potential bidders know in advance what the reserve is and what it takes to meet it.
In either case, yes, you got the coin at a price you were willing to pay so you should be reasonably happy -- but you're still paying more than you should have needed to pay.
I disagree!
The point is the seller never intended it to sell for less than his shill bid. He/she is using shill bidding as a reserve. I don't see much of a difference with or without a reserve. I place my max bid and I either top the reserve (shill bid) or not.
Joe.
That depends upon if there is one bidder or 15 different bidders. But again this is where knowledge is useful. Know YOUR max for the coin regardless of what others are doing and you will have No Worries!
Joe.
K S
<< <i>Lava in the case of the Heritage bids you mentioned, that is not shill bidding in my opinion.
I believe that when a reserve has been placed by a consignor, Heritage merely sets the bid at one increment below the reserve. That way potential bidders know in advance what the reserve is and what it takes to meet it. >>
In a sense, aren't hidden reserves in and of themselves shills?
peacockcoins
<< <i>In a sense, aren't hidden reserves in and of themselves shills? >>
Pat, I don't believe so, though I can certainly see your point. Either way, to my knowledge, Heritage doesn't hide the reserves anymore.
If the seller has placed a reserve price of $100 and you place a max bid of $75 you are not going to win the coin just because you have the high bid.
You still have to meet or beat the reserve price!!! If the auction house puts a starting price of $99 stating next bid meets reserve, the next bid over $99
meets the reserve not your bid of $75..
Read a few of the posts again.
Joe.
I read that at one point in time eBay actually allowed sellers to bid on their own items before they came up with reserves, to protect themselves from this very sort of thing from happening.
If someone has a $1000 item up for auction, do you honestly believe that he or she would intentionally risk having it swiped for $100? I DON'T THINK SO! Just last night I started the bidding on a PCGS 65 1935-D Washington Quarter for less than what I paid for it. Over 100 people looked at the coin but not one person bid. If I buy a $1200 item for $900 with the intent to make a living, the bidding will start at the price I bought it for. If only one person bids I will lose money on the transaction due to all the fees associated with it.
On the other hand, if you are the bidder, what sense does it make to bid early and often? Aren't you trying to buy for as little as possible? What sense is there in placing a max bid early? People will run up behind you and push you right into your max bid. I have a friend that I had to "school". He just HAD to always be out in front from start to finish. Inevitably it would wind up costing him MUCH more than had he never bid till the last minute!
Green, newbie, fresh meat, a live one ...all applicable terms here! It's the buddy system and it's a way of life that HAS to be or else you place reserves or high opening bids in order to minimize your cost of the listing....and guess what...nobody bids. I can't help but wonder how there are so many cheapskate bidders on FeeBay but Heritage brings in tremendous bids NOT counting the 15 cents juice or Teletrade, DLRC, Superior, Bowers & Merena and so on and so on.
<< <i>Notice of the consignor's liberty to place reserve bids on his lots in the auction is hereby made in accordance with Article 2 of the Texas Uniform Commercial Code. A reserve is an amount below which the lot will not sell. THE CONSIGNOR OF PROPERTY MAY PLACE WRITTEN RESERVE BIDS ON HIS LOTS IN ADVANCE OF THE AUCTION. ON LOTS SUBJECT TO A RESERVE, IF THE LOT DOES NOT MEET THE RESERVE THE CONSIGNOR MAY PAY A REDUCED COMMISSION ON THOSE LOTS. Reserves are generally posted online about 3 days prior to the auction closing on Internet-Only auctions, and 7 days prior to the auction on Signature auctions. IF THERE IS AN UNMET RESERVE BID POSTED ON A LOT, THE CURRENT BID DISPLAYED ONLINE WILL AUTOMATICALLY BE SET AT ONE INCREMENT BELOW THE RESERVE BID. The Auctioneer will not knowingly accept (and reserves the right to reject) live telephone or floor bids from consignors. Any successful bid placed by a consignor on his consigned lot on the auction floor or by telephone during the live session, or after the reserves for an auction have been posted, will be considered an unqualified bid, and in such instances the consignor agrees to pay full Buyer's Premium and Seller's Commissions on the lot(s) even if (s)he buys them back. Reserves are generally posted online about 3 days prior to the auction closing on Internet Only auctions and 7 days prior to the auction on Signature auctions. >>
<< <i>If you read item 11 on Hertage's Terms and Conditions web page you will find the following which answers the question Lava posed regarding bids one increment below the reserve.
***IF THERE IS AN UNMET RESERVE BID POSTED ON A LOT, THE CURRENT BID DISPLAYED ONLINE WILL AUTOMATICALLY BE SET AT ONE INCREMENT BELOW THE RESERVE BID. ***. >>
Thanks USAROK, that is the answer. So, my problem is with Heritage artificially pumping the price up one bid shy of the reserve. In the absense of the quoted policy, of which I was unaware, this has the appearance and feel of a misrepresentation.
Imagine a coin with a reserve of $3000. There are 15 bids, and the high bid is at $1,500. That is valuable information. While it is true that everyone may be lurking, it may also be true that the $1500 high bid reflects that the market collectively thinks the coin is overgarded by a point, for example. For Heritage to boost the price from $1500 to $2900 creates a false sense of demand and a false sense of approval for the coin.
I don't care for that policy.