eBay vrs42?

From: Jim Battle <frustum_at_pacbell.net>
Date: Sat Feb 12 00:37:38 2005

Eric Smith wrote:

> Jim wrote:
>>Maybe I'm old fashioned, but isn't this as ethically lacking as shill
> Shill bidding is the seller (or one of the seller's associates) putting
> in fraudulent bids to jack up the price, with no intent of actually
> transacting a sale if the shill bid wins. I think everyone can see
> why this is unethical.
> But if two bidders choose to cooperate rather than getting in a bidding
> war, how is that unethical? Not in the seller's interest, certainly,
> but the seller's interest isn't what dictates ethics. The bidders
> choosing to cooperate doesn't make any of the bids fraudulent.

The way I view it is this.

Shill bidding is the result of two people agreeing to artificially raise
the selling price of an item that is supposedly offered in a free market.

Likewise, colluding with other prospective bidders to artificially lower
the selling price of an item is depriving the seller of rightful revenue.

You say that the seller's interests isn't what dictates ethics. Not in
and of itself, certainly, but fairness to the seller is part of it. Do
you claim that the seller's interests are paramount? I don't think so.
  The whole thing works only because of fairness to all parties involved.

One could claim that shill bidding is entirely ethical in ebay's world.
  Bidders are encouraged to only bid up to the value they attribute to
an item. A shill scheme will then never cause someone to buy something
more than what the buyer values it. The seller also has to be careful
in that he makes no money if he attempts to drive the price higher than
the market values the item.

To me, it is the same reasoning the other way around. If buyers dodged
the fair bidding process, the net result would be loss of buying
opportunities as sellers give up and the remaining ones would start with
higher starting prices and a lot more "buy now" auctions. Even though
buyer collusion is tempting (and it is a lot harder to track than shill
bidding), everybody loses incrementally as ebay becomes a worse market.

> And this isn't a sealed-bid auction, and I don't see any reason why it
> would be unethical even if it were.

I too don't see that this distinction has any bearing on the discussion.

> If this were an in-person art auction, and I noticed that Nathan
> Myrvold (just to pick a random wealthy and famous person arbitrarily)
> was really keen to get an item that I wanted, would it be unethical for
> me to avoid bidding on it?

No, it wouldn't, but we were talking about collusion, not intimidation.

Besides, why would knowing someone has deeper pockets than you prevent
you from bidding? Shouldn't you bid to your comfort level anyway just
in case the other guy, for whatever reason he may have, decides to not
bid or drop out?

> If I saw Nathan Myrvold before the auction and asked him if he was
> going to bid on the item, would that be unethical? (Nathan might choose
> not to answer, might lie, or he might change his mind later.)

If you asked him if he was going to bid, I don't see anything wrong, but
I think we have different world views on this one because I would be
happy to bid against Mr. Moneypockets any time (I just wouldn't be happy
to be outbid on something I cared about).

If you asked him not to bid on an item, then yes, I'd say it would be
somewhat unethical.

> I don't think so in either case, so I don't think it is unethical
> on eBay either.

I liked the first part of your argument, but the second half doesn't
work. To me, it is a non-sequitur to use intimidation as an analogy to
Received on Sat Feb 12 2005 - 00:37:38 GMT

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