Collusion in the OA Market - Right or Wrong?

[wombat]

There is never an obligation to bid. That is why I see it as having no comparison to shill bidding.

[Ironmandrd]

Re Terry's postings--no one is saying your view is wrong or your stated presumption (that both you and the other person wanted it "equally") is wrong or should be overridden and that you have to be altruistic. I (and perhaps those on the other side) are just saying that when you can identify that it is not equal between you and the other person, it is just as okay to step aside for another OA collector that you consider an OA "friend."

 

And what duty do I owe to the consigner? To me, two friends agreeing not to fight is part of the natural progression. We are just two bidders--we don't own the consigned piece, we don't own or work for the auction house, we don't hold ourselves out as supporting the market, etc.

[buttock]

The only bids that matter are those at the margin, that would affect the final outcome, that create separation from two bidders to a single (winning) bidder.

 

So in an old-school open outcry auction (with a live bidding audience), the auctioneer calls opening at $10k...anyone? And twenty-five hands go up, only two of them matter, as a quantity greater than one is what prompts the auctioneer to raise the bid an increment - in an attempt to create separation. This will go on until the field of bidders drops to two and then separation occurs to a single (winning) bidder. The only bids that matter (whether made or not) are the final two dropping down to one.

 

All of this can be ported to online or mixed bidding audiences as well.

 

My conclusion being that most of what is called collusion is a misnomer as there is no actual impact unless one of the colluders sits in the #2 seat as underbidder, and backs off at that point! I doubt this is the case as most collusion occurs, by definition between parties that are not likely to go all the way anyway..that's why they're asking for or answering with a backoff (basically earlier than usual separation)...they're priced out of anticipated FMV or otherwise less than fully interested to begin with. Big 'ol imo on that last part, of course.

 

The only weakness I see to this argument is the psychological damage reduced overall participation/interest could have on the rest of the bidding audience. Hard to place a gain/loss value on this though.

 

There are an awful lot of assumptions in this rationale. I can't see lowball bidders conspiring with the hope that they'll walk away with a steal. In my experience the talking happens at the top where people know who is likely to bid and win.

 

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

 

No - when you shill bid the buyer is the same guy as the seller (either in name or fact).

 

In bid suppression situations you have separate bona fide buyers and bona fide sellers.

 

More often than not, shilling is intended to bid up a valid buyer, not to have the seller buy back his own stuff. You've been doing this long enough to know that.

 

The outcome in question isn't who wins or who owns it. The outcome is the price paid. From that perspective, which frankly is the only relevant perspective, they're the same thing.

 

Shilling -- one person conspires to elevate a price in their favor.

Collusion -- one person conspires to diminish a price in their favor.

 

Same coin, different sides.

[buttock]

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

Actions of inclusion (shill bidding) and seclusion (so-called collusive non-bidding) are not the same. I understand this from the realm of philosophy*. But somebody with a strong theoretical math background needs to step up and bridge the gap (of the formulas) to the layperson using formulas. We've got a group here of rather eclectic backgrounds, I'm sure somebody here can do this without batting an eye. Alas, I do not have that talent!

 

 

*The inclusive form of misleading someone is by lying, the seclusion form is not sharing all relevant (a subjective there!) details of all things at all times. Most people can see the difference.

 

There is absolutely no need to invoke theoretical mathematics to explain this. By your own stated definition, shilling is seclusion because you're not sharing the relevant details of who is bidding you up. But that's petty semantics and I don't want to get sucked into that wormhole.

[Ironmandrd]

 

. . . Sometimes I say "sorry I cannot do that for this piece" and let the best bid win.

 

. . . I don't do that for strangers or casual acquaintances and only people with whom I have some sort of collecting relationship would even ask.

 

 

These points tie-in perfectly to the example I cited.

 

? You called him a "friend" and then he became a "so-called friend" by asking. So are you saying if he was an "actual" friend you would be okay with that. If you are, then I agree with your post using my post to agree with your post. If not, than my points do not tie in perfectly with your example.

 

Because I'm saying there is a small group of people who I have had multi-year dealings with (asking advice, helping to track pieces, buying/selling with them, etc.) that if circumstances subjectively to me warrant, I would do this for. Otherwise I generally I would not.

[wombat]

For the people that think it is wrong does it center on being asked not to bid vs. making the decision on your own knowing the other person is trying to get the piece?

[buttock]

Here's a concrete example. This is a book I recently won:

 

http://www.ebay.com/itm/HEADLINE-COMICS-11-CGC-7-5-Scarce-High-Grade-Japanese-War-Cover-3rd-highest-/361469500309

 

It went for roughly 30X guide. However, if you look at the bidding history, had I been asked not to bid and stepped out it would have gone for about $1000 less, a reduction of about 30%. How do you think Ted would feel if I cost him $1000 on the sale? How can you rationalize this as ok to do because we're all good-hearted collectors? Do you think Ted would laugh it off because I was doing a buddy a favor?

 

[vodou]

There is absolutely no need to invoke theoretical mathematics to explain this. By your own stated definition, shilling is seclusion because you're not sharing the relevant details of who is bidding you up. But that's petty semantics and I don't want to get sucked into that wormhole.

No, you got me wrong. Re-read if you care to.

 

However, I'm going to stick to this the stronger and easier to understand form of my argument:

 

Another example is: The difference between actions causing harm and failing to act to prevent harm.

 

Shill bidding = actions causing harm*

 

Not bidding = failing to act to prevent harm**

 

*artificially higher price

 

**artificially(?) lower price

[Bronty]

The only bids that matter are those at the margin, that would affect the final outcome, that create separation from two bidders to a single (winning) bidder.

 

So in an old-school open outcry auction (with a live bidding audience), the auctioneer calls opening at $10k...anyone? And twenty-five hands go up, only two of them matter, as a quantity greater than one is what prompts the auctioneer to raise the bid an increment - in an attempt to create separation. This will go on until the field of bidders drops to two and then separation occurs to a single (winning) bidder. The only bids that matter (whether made or not) are the final two dropping down to one.

 

All of this can be ported to online or mixed bidding audiences as well.

 

My conclusion being that most of what is called collusion is a misnomer as there is no actual impact unless one of the colluders sits in the #2 seat as underbidder, and backs off at that point! I doubt this is the case as most collusion occurs, by definition between parties that are not likely to go all the way anyway..that's why they're asking for or answering with a backoff (basically earlier than usual separation)...they're priced out of anticipated FMV or otherwise less than fully interested to begin with. Big 'ol imo on that last part, of course.

 

The only weakness I see to this argument is the psychological damage reduced overall participation/interest could have on the rest of the bidding audience. Hard to place a gain/loss value on this though.

 

There are an awful lot of assumptions in this rationale. I can't see lowball bidders conspiring with the hope that they'll walk away with a steal. In my experience the talking happens at the top where people know who is likely to bid and win.

 

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

 

No - when you shill bid the buyer is the same guy as the seller (either in name or fact).

 

In bid suppression situations you have separate bona fide buyers and bona fide sellers.

 

More often than not, shilling is intended to bid up a valid buyer, not to have the seller buy back his own stuff. You've been doing this long enough to know that.

 

The outcome in question isn't who wins or who owns it. The outcome is the price paid. From that perspective, which frankly is the only relevant perspective, they're the same thing.

 

Shilling -- one person conspires to elevate a price in their favor.

Collusion -- one person conspires to diminish a price in their favor.

 

Same coin, different sides.

 

We'll agree to disagree. In a shill bidding scenario there is at least one bidder that is acting in bad faith. In bid suppression there is no such bidder. All parties to the bidding are legit.

[buttock]

There is absolutely no need to invoke theoretical mathematics to explain this. By your own stated definition, shilling is seclusion because you're not sharing the relevant details of who is bidding you up. But that's petty semantics and I don't want to get sucked into that wormhole.

No, you got me wrong. Re-read if you care to.

 

However, I'm going to stick to this the stronger and easier to understand form of my argument:

 

Another example is: The difference between actions causing harm and failing to act to prevent harm.

 

Shill bidding = actions causing harm*

 

Not bidding = failing to act to prevent harm**

 

*artificially higher price

 

**artificially(?) lower price

 

Not bidding when you previously intended to bid is a deliberate act, not inaction. You have to intentionally not bid. It's not like you just forgot, or sat idly by while someone sat on your bidding paddle. Since the seller ends up losing money, i.e. harm, your action caused harm.

[buttock]

The only bids that matter are those at the margin, that would affect the final outcome, that create separation from two bidders to a single (winning) bidder.

 

So in an old-school open outcry auction (with a live bidding audience), the auctioneer calls opening at $10k...anyone? And twenty-five hands go up, only two of them matter, as a quantity greater than one is what prompts the auctioneer to raise the bid an increment - in an attempt to create separation. This will go on until the field of bidders drops to two and then separation occurs to a single (winning) bidder. The only bids that matter (whether made or not) are the final two dropping down to one.

 

All of this can be ported to online or mixed bidding audiences as well.

 

My conclusion being that most of what is called collusion is a misnomer as there is no actual impact unless one of the colluders sits in the #2 seat as underbidder, and backs off at that point! I doubt this is the case as most collusion occurs, by definition between parties that are not likely to go all the way anyway..that's why they're asking for or answering with a backoff (basically earlier than usual separation)...they're priced out of anticipated FMV or otherwise less than fully interested to begin with. Big 'ol imo on that last part, of course.

 

The only weakness I see to this argument is the psychological damage reduced overall participation/interest could have on the rest of the bidding audience. Hard to place a gain/loss value on this though.

 

There are an awful lot of assumptions in this rationale. I can't see lowball bidders conspiring with the hope that they'll walk away with a steal. In my experience the talking happens at the top where people know who is likely to bid and win.

 

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

 

No - when you shill bid the buyer is the same guy as the seller (either in name or fact).

 

In bid suppression situations you have separate bona fide buyers and bona fide sellers.

 

More often than not, shilling is intended to bid up a valid buyer, not to have the seller buy back his own stuff. You've been doing this long enough to know that.

 

The outcome in question isn't who wins or who owns it. The outcome is the price paid. From that perspective, which frankly is the only relevant perspective, they're the same thing.

 

Shilling -- one person conspires to elevate a price in their favor.

Collusion -- one person conspires to diminish a price in their favor.

 

Same coin, different sides.

 

We'll agree to disagree. In a shill bidding scenario there is at least one bidder that is acting in bad faith. In bid suppression there is no such bidder. All parties to the bidding are legit.

 

Yes, there is such a bidder. It's the one who agreed not to bid. That's acting in bad faith. You are potentially causing the seller to lose money on the sale.

[vodou]

You have to intentionally not bid.

That's could only be true if bidding was an otherwise involuntary action (like breathing while you're sleeping). Since it's not, that's a ridiculous statement. I'll sleep fine knowing you do not get this

[rotembk]

Here's a concrete example. This is a book I recently won:

 

http://www.ebay.com/itm/HEADLINE-COMICS-11-CGC-7-5-Scarce-High-Grade-Japanese-War-Cover-3rd-highest-/361469500309

 

It went for roughly 30X guide. However, if you look at the bidding history, had I been asked not to bid and stepped out it would have gone for about $1000 less, a reduction of about 30%. How do you think Ted would feel if I cost him $1000 on the sale? How can you rationalize this as ok to do because we're all good-hearted collectors? Do you think Ted would laugh it off because I was doing a buddy a favor?

 

Two things:

 

1. I think you picked a bad example. Unless I'm misreading the bidding history, the underbid was $50 lower not $1,000.

 

2. When you say that the auction ended at 30X guide, where arguably the guide is FMV, who's to say Ted had an expectation, let alone right, to get a dime above the guide? This goes back to an earlier point I made: the potential seller needs to know their market. If there are only two potentially serious bidders, an action may not be the most prudent course of action for them to maximize profits.

[buttock]

Here's a concrete example. This is a book I recently won:

 

http://www.ebay.com/itm/HEADLINE-COMICS-11-CGC-7-5-Scarce-High-Grade-Japanese-War-Cover-3rd-highest-/361469500309

 

It went for roughly 30X guide. However, if you look at the bidding history, had I been asked not to bid and stepped out it would have gone for about $1000 less, a reduction of about 30%. How do you think Ted would feel if I cost him $1000 on the sale? How can you rationalize this as ok to do because we're all good-hearted collectors? Do you think Ted would laugh it off because I was doing a buddy a favor?

 

Two things:

 

1. I think you picked a bad example. Unless I'm misreading the bidding history, the underbid was $50 lower not $1,000.

 

2. When you say that the auction ended at 30X guide, where arguably the guide is FMV, who's to say Ted had an expectation, let alone right, to get a dime above the guide? This goes back to an earlier point I made: the potential seller needs to know their market. If there are only two potentially serious bidders, an action may not be the most prudent course of action for them to maximize profits.

 

Yes, the underbid was $50 less, but the second underbidder was almost $1000 less. Had (the winner) not bid, the underbidder doesn't win at his max bid, only the increment above the next underbidder.

 

As to your second point... Jesus Christ man.

[buttock]

You have to intentionally not bid.

That's could only be true if bidding was an otherwise involuntary action (like breathing while you're sleeping). Since it's not, that's a ridiculous statement. I'll sleep fine knowing you do not get this

 

Again, you're arguing petty semantics. By your rationale, bidding would have to be considered the same thing. You're only proving my point. I wish you the most restful night of sleep you've ever had.

[Bronty]

The only bids that matter are those at the margin, that would affect the final outcome, that create separation from two bidders to a single (winning) bidder.

 

So in an old-school open outcry auction (with a live bidding audience), the auctioneer calls opening at $10k...anyone? And twenty-five hands go up, only two of them matter, as a quantity greater than one is what prompts the auctioneer to raise the bid an increment - in an attempt to create separation. This will go on until the field of bidders drops to two and then separation occurs to a single (winning) bidder. The only bids that matter (whether made or not) are the final two dropping down to one.

 

All of this can be ported to online or mixed bidding audiences as well.

 

My conclusion being that most of what is called collusion is a misnomer as there is no actual impact unless one of the colluders sits in the #2 seat as underbidder, and backs off at that point! I doubt this is the case as most collusion occurs, by definition between parties that are not likely to go all the way anyway..that's why they're asking for or answering with a backoff (basically earlier than usual separation)...they're priced out of anticipated FMV or otherwise less than fully interested to begin with. Big 'ol imo on that last part, of course.

 

The only weakness I see to this argument is the psychological damage reduced overall participation/interest could have on the rest of the bidding audience. Hard to place a gain/loss value on this though.

 

There are an awful lot of assumptions in this rationale. I can't see lowball bidders conspiring with the hope that they'll walk away with a steal. In my experience the talking happens at the top where people know who is likely to bid and win.

 

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

 

No - when you shill bid the buyer is the same guy as the seller (either in name or fact).

 

In bid suppression situations you have separate bona fide buyers and bona fide sellers.

 

More often than not, shilling is intended to bid up a valid buyer, not to have the seller buy back his own stuff. You've been doing this long enough to know that.

 

The outcome in question isn't who wins or who owns it. The outcome is the price paid. From that perspective, which frankly is the only relevant perspective, they're the same thing.

 

Shilling -- one person conspires to elevate a price in their favor.

Collusion -- one person conspires to diminish a price in their favor.

 

Same coin, different sides.

 

We'll agree to disagree. In a shill bidding scenario there is at least one bidder that is acting in bad faith. In bid suppression there is no such bidder. All parties to the bidding are legit.

 

Yes, there is such a bidder. It's the one who agreed not to bid. That's acting in bad faith. You are potentially causing the seller to lose money on the sale.

 

You have a different definition of bad faith than me.

 

That halo on your head must get heavy

 

 

[Bronty]

Here's a concrete example. This is a book I recently won:

 

http://www.ebay.com/itm/HEADLINE-COMICS-11-CGC-7-5-Scarce-High-Grade-Japanese-War-Cover-3rd-highest-/361469500309

 

It went for roughly 30X guide. However, if you look at the bidding history, had I been asked not to bid and stepped out it would have gone for about $1000 less, a reduction of about 30%. How do you think Ted would feel if I cost him $1000 on the sale? How can you rationalize this as ok to do because we're all good-hearted collectors? Do you think Ted would laugh it off because I was doing a buddy a favor?

 

Two things:

 

1. I think you picked a bad example. Unless I'm misreading the bidding history, the underbid was $50 lower not $1,000.

 

2. When you say that the auction ended at 30X guide, where arguably the guide is FMV, who's to say Ted had an expectation, let alone right, to get a dime above the guide? This goes back to an earlier point I made: the potential seller needs to know their market. If there are only two potentially serious bidders, an action may not be the most prudent course of action for them to maximize profits.

 

Yes, the underbid was $50 less, but the second underbidder was almost $1000 less. Had (the winner) not bid, the underbidder doesn't win at his max bid, only the increment above the next underbidder.

 

As to your second point... Jesus Christ man.

 

No that's a misconception. There can be and often are all sorts of snipes in that $1000 dead space that didn't even register as bids due to the snipe being insufficient to place.

[rotembk]

As to your second point... Jesus Christ man.

 

Since when is an auction a process in which everyone is compelled morally or legally to bid their maximum amount and, thereby, maximize the seller's profits? You can do what some other collector-dealers do, slap the price you want and say it's either that or the high road.

 

[jaybuck43]

The only bids that matter are those at the margin, that would affect the final outcome, that create separation from two bidders to a single (winning) bidder.

 

So in an old-school open outcry auction (with a live bidding audience), the auctioneer calls opening at $10k...anyone? And twenty-five hands go up, only two of them matter, as a quantity greater than one is what prompts the auctioneer to raise the bid an increment - in an attempt to create separation. This will go on until the field of bidders drops to two and then separation occurs to a single (winning) bidder. The only bids that matter (whether made or not) are the final two dropping down to one.

 

All of this can be ported to online or mixed bidding audiences as well.

 

My conclusion being that most of what is called collusion is a misnomer as there is no actual impact unless one of the colluders sits in the #2 seat as underbidder, and backs off at that point! I doubt this is the case as most collusion occurs, by definition between parties that are not likely to go all the way anyway..that's why they're asking for or answering with a backoff (basically earlier than usual separation)...they're priced out of anticipated FMV or otherwise less than fully interested to begin with. Big 'ol imo on that last part, of course.

 

The only weakness I see to this argument is the psychological damage reduced overall participation/interest could have on the rest of the bidding audience. Hard to place a gain/loss value on this though.

 

There are an awful lot of assumptions in this rationale. I can't see lowball bidders conspiring with the hope that they'll walk away with a steal. In my experience the talking happens at the top where people know who is likely to bid and win.

 

Regardless, if you take a black-and-white view, it's the same principle as shilling, but occurring from the converse side. You can rationalize it all you want and say that it's not likely to affect outcomes, but it's the same exact principle.

 

No - when you shill bid the buyer is the same guy as the seller (either in name or fact).

 

In bid suppression situations you have separate bona fide buyers and bona fide sellers.

 

More often than not, shilling is intended to bid up a valid buyer, not to have the seller buy back his own stuff. You've been doing this long enough to know that.

 

The outcome in question isn't who wins or who owns it. The outcome is the price paid. From that perspective, which frankly is the only relevant perspective, they're the same thing.

 

Shilling -- one person conspires to elevate a price in their favor.

Collusion -- one person conspires to diminish a price in their favor.

 

Same coin, different sides.

 

We'll agree to disagree. In a shill bidding scenario there is at least one bidder that is acting in bad faith. In bid suppression there is no such bidder. All parties to the bidding are legit.

 

Yes, there is such a bidder. It's the one who agreed not to bid. That's acting in bad faith. You are potentially causing the seller to lose money on the sale.

 

I think the lack of inducement is the difference between good and bad act. For shilling, there is inducement. Using Mike as an example, if you bid it up to a certain amount, I will buy it back off you. But with asking someone not to bid, there is no inducement. It's "Hey man, can you do me a favor, and stay out of this auction? I am dying to get this piece." is very different from "If you stay out of this auction I will give you a free comic book".

[vodou]

By your rationale, bidding would have to be considered the same thing.

Same as what?