eBay combines a proxy bidding system with minimum bid increments. These interact in a peculiar way. If you have placed the first bid of $5 and the seller’s reserve is $1, then the initial bid is recorded at $1. Your true bid of $5 is kept secret and the system will bid for you (by “proxy”) until someone raises the price above $5.
Now I come along and bid, say $2. That’s not enough to outbid your $5, so you remain the high-bidder but the price is raised. In this case it is raised to $2 plus the minimum increment, say $0.50, provided that sum is less than your bid. In this case it is. But suppose the next bidder comes along and bids $4.75. Again you have not been outbid and so you remain the high bidder but in this case $4.75 + $0.50 is larger than $5, and when this happens the price is raised only to equal your bid, $5.
So, if you are bidding and your bid was not high enough to displace the high bidder but the price didn’t rise by the minimum increment above your bid, then the new price is exactly the (previously secret) bid of the high bidder. If you happen to also be the person selling the object up for sale and you are shill bidding, now is the time to stop because you have just raised the price to extract all of the surplus of the high bidder.
Notice how, as a shill bidder, you can incrementally bid the price up and, in most cases, hit but never overshoot the high bid. (“In most cases” because you must outbid the current price by the minimum increment and you get unlucky if the high bid falls in that gap. A good guess is that the high bidder is bidding in dollar denominations. If that is the case you can guarantee a perfect shill.)
This is discussed in a paper by Joseph Engelberg and Jared Williams (Kellogg PhDs.) The authors have a simple way to detect sellers who using shills in this way and they estimate that at least 1.3% of all bids are shill bids.
Homburg hail: barker.
17 comments
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February 13, 2010 at 3:23 pm
Arun
Assume that the intial bidder (bidder A) places a bid at $5, and the minimum increment of bidding is $0.5. eBay can fix the system such that the second bidder (bidder B) can bid upto $4.99 and the system would raise the price in lumps of $0.5 till it touches $5.49 for B alone but would keep the price at $5 for A. If B quits now, A would be asked to pay $5 only. If B raises the bid to $5, the price goes to $5.5 for both parties, B can be made the winner of the auction at this point. Now, both parties would know they’re bidding equal amounts. If A chooses to stay in the auction and raise the bid to $6 or above, the same process would play out again.
February 14, 2010 at 8:01 am
New York OA Trader | Shared Items From Around The Web – February 14, 2010
[...] How to Shill on eBay [...]
February 15, 2010 at 7:42 am
chug
(Jeff – sorry to leave this twice – I forgot your comment link is at the TOP of the post)
The way to not worry about shill bidding on eBay is to decide, in advance, how much you are willing to pay for an item, then setting that up on a sniping service. NOT by placing the bid on eBay – that is dumb for the reason you discuss above, among many others.
I do not engage in bidding wars, with shills or with other legitimate bidders. I decide how much I am willing to pay, set that price on a sniping service, and forget about the auction until I am notified that I won or lost. My snipes are set to be placed 6 seconds before the auction ends.
On more expensive items, my preliminary research into the seller includes looking at other sales and recently completed sales to see if there appears to be shilling going on. For items below $75 I only care about seller’s reputation and shipping cost.
March 15, 2010 at 3:11 am
mike1144
good informative post
thanks for sharing it
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June 10, 2013 at 5:00 am
Sefer
- I seriously gapsed when I saw this card the first time, i would die to have a picture of my kids that adorable. I sure hope you are blowing it up big and beautiful soon, if so you will have to show us next month when we come visit!!!
June 13, 2013 at 9:56 am
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June 17, 2013 at 1:50 am
Chris
If you have a minimum amount you are willing to sell an item for, the best thing to do is to put that amount as your starting bid, or else you put on a reserve, which can be concealed from buyers. I don’t think you can refuse to sell something because it didn’t end as high as you wanted it to.Some items do end up unsold because the reserve isn’t met. I have never really seen the point of putting a secret reserve on something myself, it seems to me you might as well be upfront about the amount you are willing to sell something for, but a lot of people seem to do it.I don’t suppose you can actually be forced to sell something to the buyer if you don’t want to, but I think it will result, not surprisingly, in you getting negative feedback, and possibly some kind of penalty from ebay. It would have been better to have made your starting price higher. Was this answer helpful?
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May 12, 2010 at 11:54 am
vtec
if you want to shill and NOT easy to get caugh!
first set up another account
when you bid on your own item, bid just below a dollar increasement, say if you are selling something start from $0.99 and u want AT LEAST $100 for it and you KNOW people will pay $100 for it. bid for $98-99 1-2 days after the auction starts! u may become the high bidder but u will surely get out-bid later. that will give u a ‘hidden reserve price’
in fact,, shill bidding isn’t really that unethical if you shill bid your reserve price reasonably low. because of the # of snipers these days, u will get alot of people watching! but no1 bidding, and on the last 10 seconds, there is one very intrested buyer forgot to bid and another one thinking it would end low so he bid a low price therefore the sniper got benifit and won the item.
your shill account should NEVER be logged on at the same computer/IP as ur normal account! try change ur IP, reboot your modem before logging onto another account, BEST way to do it is just ONLY log into your shill account at a public/work computer and ur seller account on home computer
your shill account should NOT only bid on your items, so open up ebay and search for cars, laptops or simply just ANYTHING that has a high-demand.
laptops for example, change the sorting method to ‘newly listed’ first, and then price range from $2- $300, now you will pretty much see all the laptops that are for sale that has just been listed on not long and has a bit or 2 on it.. and BID on those laptops that the price is still low (where u know for sure u will be out-bid. and just bid a little higher than the next price up, 90% of the chance u would get instantly out-bidded.
this way, on the eBay system (even the eBay admin staff) will be hard to tell that your shill account is ONLY bidding on ur own account, because the shill account is just a new ebay user that bids on ALOT of things but never manage to win anything.
September 4, 2012 at 9:23 am
Ernest
Great advice vtec! Tried to look everywhere for tips on how to not get caught, but only you revealed few good ones, thanks
March 16, 2011 at 4:25 am
Tk
Vtec, go back to school and learn some grammar, and do some research while you are at it… that is, if Ebay hasn’t caught you yet. Your advice of being the bidder who never wins anything is EXACTLY the behavior Ebay looks for. Dumb ass.
July 27, 2011 at 5:11 am
bazza
i recently shill bidded and was caught , i was not really that bothered and did not really consider it illegal as such. i just thought its my item after all.
for a few weeks after i told people about it and was supprised by the amount of people who had also bidded on there own items most never caught but some who had , i include accountentsan estate agent and other professionals amongst the people who addmited to me they had also shill bidded.
April 5, 2012 at 11:53 pm
Bb
If you don’t want to sell your item for less than $x, set a reserve, or a start price near the amount you want. Don’t shill. I don’t care what you think — it is unethical.
January 11, 2013 at 7:35 pm
john
AND WE DON’T CARE WHAT YOU THINK…. NO ONE IS FORCING ANOTHER TO BID HIGHER SO IF YOU DON’T WANT TO PAY MORE DON’T BID MORE. EBAY IS RIGGED HEAVILY AGAINST SELLERS.
April 9, 2012 at 8:28 am
subs
How novel! Setting a reserve when you sell? Or just bidding the highest amount you are willing to spend to win an auction?
Well, not anymore. Regardless of the mechanics of the specific shilling methodology detailed above, here’s what is clear from reading the article and the comments. It lays bare what we already know: Shilling and Sniping are part of the fabric of eBay now. It’s no longer an even-playing-field auction site. To ‘win’ an auction, you usually have to snipe; for best returns as a ‘seller’ people frequently shill. The unfortunate are those rubes who don’t participate in both or either and walk in and sit down at what they think is a fair game.
As bad as Sniping and Shilling is eBay’s ongoing (insi)stance that eBay is fair. It is not. They should just put a banner on the homepage that says you should expect to (virtually) pull your pants down and bend over for your first ten auctions.
Like any (eco)system- from the stock market to waiting on line for a hot dog- it’s been gamed to offer a serious advantage of knowledgeable insiders, at the expense of neophytes and the naïve.
January 12, 2013 at 3:55 am
Frank Green
BIGJJSTUDD, This guy is the king of shill bids. He has hundreds of bogus Ebay accounts that he smartly uses to inflate the prices on his auctions. If by chance he accidentally wins then, he nefariously waits 45 days, when that auction is not longer visible and re-posts it after taking new pictures of the SAME item.
He also uses these fake EBAY accounts to bid and win auctions from anyone selling similar items at the same time he is, or he will inflate the price so that his auction looks more attractive.
On top of all this, he covertly buys fake/reproductions parts and advertises them as real. AVOID BIGJJSTUDD at all COSTS@
January 23, 2013 at 5:25 pm
FilmNoirFan
267philly67 uses william.h1981 to shill bid on coins. The seller cancels most of the shill’s bids with bogus statements claiming they’re blocked but keep getting through or when they win, the seller and shill have left suspicious sounding feedback. The seller has supposedly told the shill to stop bidding but they have exchanged feedback for months. Who allows an unwanted bidder to keep bidding for months? This shill came to my attention when one of the legitimate bidders noticed someone not quite right and mentioned it on the Answer Center. I have been tempted to contact the winners who have left the seller positive feedback to let them know what the seller had been doing but I would get sanctioned for transaction interference. I should let the seller know that they have been accused of shilling without letting them know who it was that made the accusation.
I have reported the shilling to ebay for over a week and not on the same items. It seems that if there isn’t a lot of retractions, which is common with shill bidding, ebay doesn’t seem to notice. I will continue to report the shill about once a week. Ebay used to be quick with handling shills. Usually they would shut down the shill account and if the seller uses another account to shill somemore (I’ve seen it happen), the new shill and the seller would get shut down (I’ve seen that too).
Hopefully 267philly67 and william.h1981 will also get shut down.
April 8, 2013 at 8:24 pm
joe
idiots ebay benifits from shill bidding, the more your item sells the more ebay + paypal which is owned by ebay gets. ebay is a flawless system of commerce. you think they didnt know about shill bidders? If they didn’t get money out of people scamming people they would heavily enforce it. In an auction there are 4 shares to the sell. 1-ebay 9 percent final value 2-paypal 3 percent so together ebay gets 12 percent 1/10 3- shipping which ebay also gets money for the printing shipping label 4-your cut at the end after 12 percent and shipping cost. Why does ebay stay in buisness? because of chinese wholesalers who make them millions if not billiions a year. fuck gramer if you cna raed it thne its fyne