Collusion in the OA Market - Right or Wrong?

[Nexus]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

Just getting caught up in this thread, but this pretty much sums it up for me, too.

 

In terms of my own auction bidding, I never ask anyone to back off. I'd rather everyone place their bids and let the chips fall where they may. Highest bid wins. Which is why I don't talk about my planned bidding before the auction. It's not a conversation I want to have, because I don't want to know what other people are going to be bidding on, either! I've had people tell me after the fact "hey, if you told me you wanted the piece that badly, I wouldn't have bid you up." Well, I'm OK with that, even if I potentially paid more because I didn't ask. It can go both ways, IMO...if I make my interest known, yes, some friends will step aside. But there are other who might place "punishment" bids. So likely a wash in the end. I'd rather go into the bidding without a lot of extraneous noise in the background.

 

However, I have been asked to refrain from bidding by friends for whom a piece has a special meaning. In those cases, and if I can tell that it means more to them than it does to me, I'll step aside. However, it does drive me nuts when they place a lowball bid and/or even forget to bid! Then I don't pay attention when they come back again down the road. My caveat now is that I'll step aside...but you have to bid to win. Not that I expect you to win, but you have to make a legitimate effort. Otherwise, don't bother me again.

[Changer]

I'm glad there is someone out there who is deciding what is obvious to everyone "rational". Instead of actually debating points. Thanks for also figuring out my intent. Very nice....

[Mmehdy]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

Right is right and wrong is wrong bill..gaming the auction system for a lower price or a higher price is not fair...plain and simple...not matter how you dress it up...excuse it up...or friend it up...nothing about being on a high horse...just call it what it is...UNFAIR.

[Terry Doyle]

 

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

Good summary, Bill.

 

If miffs me when collectors ask for your opinions but then get upset when you don't share their views (like they were expecting unanimous approval for such a controversial method of operation???).

 

 

[Changer]

I agree with Mmehdy, note that I am almost 100% buyer, and I was very unhappy with Romita's action. In that case I may have overpaid due to the inflated prices. But if I sell, sounds like I will get the other side of artificially deflated prices, now that isn't likely due to I am not much of a seller.

 

Still I think sellers and buyers should expect a fair price in an auction, not just based on backroom deals. If we all accept manipulating the market to the level of our ability to make agreements behind the scene, it creates a "blackmarket" value whether selling or buying. I imagine when anyone from here sells, they would like to know there isn't a bunch of bids being held up due to phone calls in the background.

 

Now in reality who knows how much It affects the market, as it would require a large net of collectors who know each other to work together (like OPEC) to affect it greatly, but just like we never know what Romitaman actually did, it still undermines the confidence that marketplaces are fair. In doing so we all lose something, of course unless you like gaming.

[Terry Doyle]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

In terms of my own auction bidding, I never ask anyone to back off. I'd rather everyone place their bids and let the chips fall where they may. Highest bid wins. Which is why I don't talk about my planned bidding before the auction. It's not a conversation I want to have, because I don't want to know what other people are going to be bidding on, either!

 

Eggs-actly!

[vodou]

...it still undermines the confidence that marketplaces are fair.

There's no such beast as fair.

It's a theoretical conceit.

As long as you remember that, as both buyer or seller, you'll never be unduly confident in any market.

Nor should you be!

[Meeley Man]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

Right is right and wrong is wrong bill..gaming the auction system for a lower price or a higher price is not fair...plain and simple...not matter how you dress it up...excuse it up...or friend it up...nothing about being on a high horse...just call it what it is...UNFAIR.

 

 

 

[Changer]

So given what Vodou says, we are all to be cynical about all prices out there and each on survivor island, and the appropriate action choose a gang, for the sake of protection. Agreed the world isn't fair, but to get back to the original question is it wrong? I would say unfair.

[buttock]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

In case you were referencing me, I'm not upset or offended at all. I'm just discussing the topic at hand. I've traditionally been outspoken against those whose moral indignance has no restraint. I've been asked to shill and asked to refrain from bidding multiple times and have evolved my thinking over the years based off of the thoughts of a few people whose opinions I greatly respect. I believe strongly that a completely free market is the best way to go, but I also understand that people are people and will do what they want. I don't really have a problem with what Burkey did, and I don't really have a problem with refraining from bidding due to conspiring between bidders. But I'll call a spade a spade, and to do otherwise is, IMO, rationalizing.

 

Let the group hug commence.

[comix4fun]

I think it's pretty obvious for most everyone rational that shill bidding is bad and that there is nothing wrong with friends deciding to back off a piece because someone else wants it. Clearly by the posts most people here see that those 2 scenarios are light years apart.

 

I think the fact that this conversation is even taking place is due to a number of factors:

1) People like to chat about OA

2) The topic started creeping up a couple months ago or whenever the shilling fiasco came out, as a bit of pushback in defense of shillers

3) These boards (although I don't see it anywhere near as much in the OA section) seem to have a really weird number of people who act "ultra moral" (at least in their mind), and attack everyone else who doesn't share their beliefs. Getting offended when people don't share your specific life rules/beliefs is a sure fire way to be upset a good portion of the time btw.

 

Right is right and wrong is wrong bill..gaming the auction system for a lower price or a higher price is not fair...plain and simple...not matter how you dress it up...excuse it up...or friend it up...nothing about being on a high horse...just call it what it is...UNFAIR.

 

 

That's true...the same can be said of pumping certain artists or genres or types of artwork that a friend may own a pile of, or excusing the pumping for friends...those quacks.

[zhamlau]

 

 

If you aren't the seller, you are under no moral/legal obligation to get involved in an auction. If you choose not to bid, FOR ANY REASON, on no level can that be considered immoral or unethical. You aren't stopping anyone else from bidding, you don't owe the seller the best possible price he can get. In this case you are basically choosing to value helping a friend and strengthening that bond over the value of buying a new bauble to hang on your wall.

 

If it didn't work, so be it. You didn't stop anyone else from doing what they wanted to do.

 

 

[Bronty]

+1

[suspense39]

+2

[MyNameIsLegion]

+3

[delekkerste]

Just getting caught up in this thread, but this pretty much sums it up for me, too.

 

In terms of my own auction bidding, I never ask anyone to back off. I'd rather everyone place their bids and let the chips fall where they may. Highest bid wins. Which is why I don't talk about my planned bidding before the auction. It's not a conversation I want to have, because I don't want to know what other people are going to be bidding on, either! I've had people tell me after the fact "hey, if you told me you wanted the piece that badly, I wouldn't have bid you up." Well, I'm OK with that, even if I potentially paid more because I didn't ask. It can go both ways, IMO...if I make my interest known, yes, some friends will step aside. But there are other who might place "punishment" bids. So likely a wash in the end. I'd rather go into the bidding without a lot of extraneous noise in the background.

 

However, I have been asked to refrain from bidding by friends for whom a piece has a special meaning. In those cases, and if I can tell that it means more to them than it does to me, I'll step aside. However, it does drive me nuts when they place a lowball bid and/or even forget to bid! Then I don't pay attention when they come back again down the road. My caveat now is that I'll step aside...but you have to bid to win. Not that I expect you to win, but you have to make a legitimate effort. Otherwise, don't bother me again.

 

I can understand if people just want to let the chips fall where they may and never ask anyone to back off of anything. It's clean and there's never a conflict that way. It's not fun when a friend asks if you would stand down on a piece and you have to tell them no, as happened to me not long ago. That said, I don't understand the moral outrage by some that a friend might ask that another friend stand down on a piece. Let me use another example to explain my point (and, speaking of examples, I'd like some feedback on my Stupid-Man example earlier - please someone explain to me how Bidders A & B are taking food out of the mouths of consignors and are horrible people).

 

I bought a cover at auction not that long ago for about $6K, which let's say is FMV. But, my max bid on the piece was more than double that. It wasn't a "must-have" for me, but I did really want it, and, well, it's my money to spend as I please. But, let's say for a moment that this was the first comic that my good friend ever read, and that it was his Grail and he was planning to go hard for it. But, let's say we had this discussion on the Boards a year ago, so that, when his Grail cover came to auction, he felt uncomfortable asking any of his friends to stand down, or even mentioning it to anyone. So, I either end up outbidding him, or else he ends up paying more than double FMV to win it. And, either way, I find out after the fact that it's his Grail and feel terrible afterwards that I either won the piece (unless the misguided moralists here expect him to suffer in silence) or caused him to pay an extra $7-8K for a piece that "should" only be worth $6K. Like Chris C. said - wouldn't I have liked to have known in advance? And, if I did, what kind of a-hole would I be to tell him, "naw man, you're my friend and all, but we gotta let the bidding take its natural progression - you feel me, brah?"

 

There is NEVER a legitimate reason to shill an auction. But, I think we can all conceive of very legitimate scenarios (like the above) whereby it would be nice to know that a friend wants something more than I do and to change/coordinate our bidding strategies accordingly. And so, the two are absolutely NOT two sides of the same coin and any attempt to equivocate the two is just flat-out wrong and misguided.

 

Again, if people would rather be left alone, that's their prerogative. In none of these scenarios is anyone holding a gun to anyone's head. And, no one is talking about doing any favors for casual acquaintances, which is totally irrelevant.

[delekkerste]

I believe strongly that a completely free market is the best way to go, but I also understand that people are people and will do what they want. I don't really have a problem with what Burkey did, and I don't really have a problem with refraining from bidding due to conspiring between bidders. But I'll call a spade a spade, and to do otherwise is, IMO, rationalizing.

 

I'm all for free markets, but, in my version of free markets, people are actually allowed to freely exchange information and act accordingly.* The logical consequence of the heavy-handed, misguided moralistic stance that some here are taking is that information should not or cannot be shared freely. If my Grail piece comes up for sale, apparently I can't ask people not to stand down on it according to these people, without committing some kind of ethical violation. And, if that's the case, then I really shouldn't be allowed to even tell any of my friends that it's my Grail, because, really, unless they're denser than tungsten, that's code for "I'm bidding to win on this piece; please don't run up the price on me". Hence, the logical consequence is that information of this nature cannot be freely shared.

 

And, so, you have to ask yourself: if it's wrong to signal these intentions implicitly or explicitly, then, what is the consequence to the person who comes into possession of said information? Let's say my friend, who doesn't have the level of financial resources as I do, tells me that he's going to break the bank and bid $10K for that $6K FMV cover I mentioned in my previous post, because it's his Grail. And, let's say that, in the absence of this knowledge, I was planning to bid $12.5K (because I occasionally have bid 200% or more of FMV on lower-end pieces). Well, now that I am in possession of this information about my friend's intentions, what would the moralists here have me do? I mean, by this logic, am I not morally obligated to proceed as if I had not received this information and run the price up on my friend? If people truly believe in what they are saying, that there is some kind of moral or ethical violation being committed by asking for or complying with an implied or explicit request for a favor, then isn't this the only possible course of action whereby I am not also in the wrong?

 

Is this what you call a free market? Isn't a free market supposed to encourage the flow of information and react accordingly to such, so that it is flexible and dynamic? This sounds like just the opposite - a sclerotic market where people are not encouraged to disseminate or react to information without offending various peoples' sensibilities.

 

Unlike yourself, I have a problem with Burkey's actions (i.e., shilling). There are no situations in which shilling is OK. Doing favors for friends and sharing information? I have no problem with it at all. You'd have to subscribe to some pretty deficient logic to believe that this is somehow ethically or morally wrong, or is somehow equivalent to shilling. But, please, for the moralists out there, tell us again how doing a friend a favor is taking food out of the mouths of consignors' children and how we should all be obligated to bid to our pre-ordained max in spite of whatever information we may learn about a friend's situation. Because that is the singular, inescapable, only possible logical conclusion of this argument.

 

 

 

 

* And before anyone tries to make a misguided example about insider trading in securities markets, may I remind you that, in our example, no one is in possession of any material non-public information that would breach a fiduciary duty by disclosing - it's not a comparable situation in the least.

[MyNameIsLegion]

Let me throw out another scenario. Bidders A and B are both well-to-do collectors and both grew up loving Stupid-Man drawn by Joe Schmoe. Let's say that Stupid-Man covers sell for around $10K each. And that, in the absence of collusion, these guys would bid the price of these covers up to $25K each. But, Bidders A and B are friends so, they, in turn, decide to coordinate bidding strategies, with each standing down on every other Stupid-Man cover that shows up at auction.

 

As a result, Stupid-Man covers consistently sell for around $10K instead of $25K each. Is this wrong? Have Bidders A & B taken $15K per cover out of the mouths of the consignors' children? Are the consignors entitled to $25K per cover just because that's what the covers would theoretically go for in the absence of Bidders A & B being friends and coordinating bidding strategies? Even though in the absence of both Bidders A & B entirely they'd still only be getting the same $10K from other collectors?

 

Even though Bidders A & B's actions are dramatically affecting the public sale price of Stupid-Man's art, I still don't see anything wrong with this. Two friends who are willing to pay above what the rest of the market will pay (and thus set a new market level) decide to coordinate so that prices stay closer to the prevailing market level. The alternative being that they both go at it every time and cost themselves a lot of money. I get it that two friends who are heads of firms in an oligopolistic industry shouldn't be allowed to fix prices or squeeze a mutual supplier or otherwise do something that leaves people with no alternative. But, two friends deciding to coordinate bidding strategy in a comic art auction does not prevent others from paying more if they want something.

 

If Bidders A & B decided that, not only would they not compete for the same cover, but that neither of them would pay more than $8K for any of them, it doesn't mean that Stupid-Man covers are going to $8K, because others will bid them up to $10K. And, if somebody else other than Bidders A & B wants to win a cover, well, then they've got to step up and bid more. But, in the absence of that, I don't see how the sellers are entitled to the $25K per cover that would only prevail if Bidders A & B competed against each other and paid 150% higher than the prevailing FMV. I would argue that FMV is still $10K even though two individuals in a competitive environment would be willing to pay $25K.

 

Since Gene took the time to write a thought out scenario, one that I believe is quite common in fact I will weigh in:

 

If FMV of Stupid-Man Covers is 10K, and Bidder A & B are willing to pay up to 25K to get one- one cannot assume their interest and resources are infinite. If they each buy a 25K coves and blow the kids college fund and their wives divorce them, and the family dog pees on their leg- let's say that takes them out of the market. The next Stupid-Man cover for sale's FMV is what? The Dagnabitty Bros put one up for "please inquire" and quote 27K, and that mother sits stone cold dead. Another goes up for auction, and hammers for 8K. Turns out those 2 guys were the biggest collectors of Stupid-Man. now they've burned themselves out. One of them has to raise cash for his daughters boob job who shamed him into paying for ruining her life when she had to downgrade to a flip-phone and JC Penny's clothes and now she has low self-esteem. Dagnibbity Bros, offer him $7K, citing recent auction price of 8K, and hey they gotta make a living too. Sucks to be a Stupid Man Cover fan. If Bidder A & B had "colluded" they might still be married, the dog would still like them, and their kids wouldn't be up AND they'd have at least 2 Stupid Man Covers apiece, and FMV would still be 10K.

 

The moral of the story is: FMV shouldn't be determined by 1 or 2 people willing to pay the most. Highest price paid does not = FMV. FMV is more accurately what the underbidder(s) were willing to pay. As Gene said, if Bidder A&B never paid 25K, or even 10k for the Stupid Man covers, FMV would be whatever the other guys in the Stupid-Man market were willing to pay. Could be 10K, could be 8K. In the end, it probably best for buyer, seller, the hobby, and the moral fabric of society if things don't get too frothy too fast, or in the end short term profits will lose value just as quickly. Shilling distorts the perception of value in the market on the selling side. It's a deceptive practice whose sole purpose is to screw people out of money. Colluding on the buying side is an altogether different thing. It is the antithesis of shilling in fact, because, in my experience, it often involves trying to help another person out. It may be tit for tat, maybe not, but it still requires the participant to willfully consider someone other than themselves. Explain to me how that's a bad thing?

 

 

[drdroom]

Let me throw out another scenario. Bidders A and B are both well-to-do collectors and both grew up loving Stupid-Man drawn by Joe Schmoe. Let's say that Stupid-Man covers sell for around $10K each. And that, in the absence of collusion, these guys would bid the price of these covers up to $25K each. But, Bidders A and B are friends so, they, in turn, decide to coordinate bidding strategies, with each standing down on every other Stupid-Man cover that shows up at auction.

 

As a result, Stupid-Man covers consistently sell for around $10K instead of $25K each. Is this wrong? Have Bidders A & B taken $15K per cover out of the mouths of the consignors' children? Are the consignors entitled to $25K per cover just because that's what the covers would theoretically go for in the absence of Bidders A & B being friends and coordinating bidding strategies? Even though in the absence of both Bidders A & B entirely they'd still only be getting the same $10K from other collectors?

 

Even though Bidders A & B's actions are dramatically affecting the public sale price of Stupid-Man's art, I still don't see anything wrong with this. Two friends who are willing to pay above what the rest of the market will pay (and thus set a new market level) decide to coordinate so that prices stay closer to the prevailing market level. The alternative being that they both go at it every time and cost themselves a lot of money. I get it that two friends who are heads of firms in an oligopolistic industry shouldn't be allowed to fix prices or squeeze a mutual supplier or otherwise do something that leaves people with no alternative. But, two friends deciding to coordinate bidding strategy in a comic art auction does not prevent others from paying more if they want something.

 

If Bidders A & B decided that, not only would they not compete for the same cover, but that neither of them would pay more than $8K for any of them, it doesn't mean that Stupid-Man covers are going to $8K, because others will bid them up to $10K. And, if somebody else other than Bidders A & B wants to win a cover, well, then they've got to step up and bid more. But, in the absence of that, I don't see how the sellers are entitled to the $25K per cover that would only prevail if Bidders A & B competed against each other and paid 150% higher than the prevailing FMV. I would argue that FMV is still $10K even though two individuals in a competitive environment would be willing to pay $25K.

 

Since Gene took the time to write a thought out scenario, one that I believe is quite common in fact I will weigh in:

 

If FMV of Stupid-Man Covers is 10K, and Bidder A & B are willing to pay up to 25K to get one- one cannot assume their interest and resources are infinite. If they each buy a 25K coves and blow the kids college fund and their wives divorce them, and the family dog pees on their leg- let's say that takes them out of the market. The next Stupid-Man cover for sale's FMV is what? The Dagnabitty Bros put one up for "please inquire" and quote 27K, and that mother sits stone cold dead. Another goes up for auction, and hammers for 8K. Turns out those 2 guys were the biggest collectors of Stupid-Man. now they've burned themselves out. One of them has to raise cash for his daughters boob job who shamed him into paying for ruining her life when she had to downgrade to a flip-phone and JC Penny's clothes and now she has low self-esteem. Dagnibbity Bros, offer him $7K, citing recent auction price of 8K, and hey they gotta make a living too. Sucks to be a Stupid Man Cover fan. If Bidder A & B had "colluded" they might still be married, the dog would still like them, and their kids wouldn't be up AND they'd have at least 2 Stupid Man Covers apiece, and FMV would still be 10K.

 

The moral of the story is: FMV shouldn't be determined by 1 or 2 people willing to pay the most. Highest price paid does not = FMV. FMV is more accurately what the underbidder(s) were willing to pay. As Gene said, if Bidder A&B never paid 25K, or even 10k for the Stupid Man covers, FMV would be whatever the other guys in the Stupid-Man market were willing to pay. Could be 10K, could be 8K. In the end, it probably best for buyer, seller, the hobby, and the moral fabric of society if things don't get too frothy too fast, or in the end short term profits will lose value just as quickly. Shilling distorts the perception of value in the market on the selling side. It's a deceptive practice whose sole purpose is to screw people out of money. Colluding on the buying side is an altogether different thing. It is the antithesis of shilling in fact, because, in my experience, it often involves trying to help another person out. It may be tit for tat, maybe not, but it still requires the participant to willfully consider someone other than themselves. Explain to me how that's a bad thing?

 

Classic post.

[drdroom]

Suspense39 made a passing comment to the effect that, having passed on a piece that his friend was pursuing, he then went and bought some other piece. So the tragic possible loss of a higher sales price for one seller just means a higher price realized for another seller, and likely a more rational distribution of values. I mean, its not like we're not going to spend every dollar we can scrape together on this stuff.