ebay finds that PWCC engaged in shill bidding?

[Peter_Spaeth]

Originally Posted by BobC

I am totally against shilling and seeing someone get run up in price. But the other complaint by many people not directly involved in such a shilled transaction is that it then possibly sets a higher false price for the card that was shilled so that when they later go to acquire that same card, they may end up having to pay more for it than they may have wanted. But if someone did put up say a $100 max bid on a card that would normally only sell for $30-$40, and it got shilled up to say $80, is that really a false and inflated market price?

If the person who ended up winning it at $80 was actually willing to go $100 for it, then isn't $100 the true market price and they actually got the card they wanted at less? I always thought the definition of market value/price was what someone was willing to pay for something in an open, arms length transaction. But in reality, isn't what normally ends up getting recorded as the highest price someone is willing to pay actually based on the second highest amount someone is willing to pay, and not necessarily the true highest amount?

I understand the concept of market manipulation through shill bidding, but for that to be what is actually occuring, don't the people behind the market manipulation scheme actually have to end up winning (and paying for) the overly priced cards they are trying to manipulate? If they ended up just increasing what a legitimate buyer was actually willing to pay for the card, haven't they really just succeeded in exposing a more true, top market value for the card?

If I understand your point, I think the answer is no. People pay based on what other people are bidding and what a card has sold for. Take a single auction. I own ten other examples of the card being offered, which has sold before for 100 max. I hope to push up the price so as to unload some of mine, so I bid 125, hoping a "legitimate" buyer thinks it's a real bid and that the card is going up, and tops me at 130. Odds are I will hook at least one such buyer. I do this gradually over time with 5 more examples and eventually the price of the card gets to 200. I would call that a manipulated price, not a new true one. And I haven't won any.

[Mark17]

Originally Posted by Peter_Spaeth

I hope to push up the price so as to unload some of mine, so I bid 125, hoping a "legitimate" buyer thinks it's a real bid and that the card is going up, and tops me at 130. Odds are I will hook at least one such buyer. I do this gradually over time with 5 more examples and eventually the price of the card gets to 200. I would call that a manipulated price, not a new true one. And I haven't won any.

An asset is "worth" what someone will pay. If a store owner, or a guy at a show, or a buy it now on ebay is asking $130 and someone is willing to pay it, there's your comp. If you bid on a card so as to push it into range where someone will have to pay $130, and someone does, then that is a comp. The thoughts going through the minds of the store owner, the table holder at the show, the ebay seller, or the 2nd highest bidder don't matter.

[Peter_Spaeth]

Originally Posted by Mark17

An asset is "worth" what someone will pay. If a store owner, or a guy at a show, or a buy it now on ebay is asking $130 and someone is willing to pay it, there's your comp. If you bid on a card so as to push it into range where someone will have to pay $130, and someone does, then that is a comp. The thoughts going through the minds of the store owner, the table holder at the show, the ebay seller, or the 2nd highest bidder don't matter.

So you don't recognize market manipulation? OK, we can disagree. Shill bidding shouldn't bother you then, as long as someone really paid at the end of the day.

[Mark17]

Originally Posted by Peter_Spaeth

So you don't recognize market manipulation? OK, we can disagree. Shill bidding shouldn't bother you then, as long as someone really paid at the end of the day.

Please, Peter, don't put words in my mouth. I do not think shill bidding is okay.

If a card has been selling in the $120 range and someone lists it in their store/convention table/ebay/net 54 marketplace for $130, are they also "manipulating the market" by trying to push the price up? In a rising market, many dealers do raise their prices. Is it against the Peter Principle for them to try to get more for their cards by raising their ask prices?

Bottom line, if people are paying $130 for a card, that is what it is "worth."

[Peter_Spaeth]

Originally Posted by Mark17

Please, Peter, don't put words in my mouth. I do not think shill bidding is okay.

If a card has been selling in the $120 range and someone lists it in their store/convention table/ebay/net 54 marketplace for $130, are they also "manipulating the market" by trying to push the price up? In a rising market, many dealers do raise their prices. Is it against the Peter Principle for them to try to get more for their cards by raising their ask prices?

Bottom line, if people are paying $130 for a card, that is what it is "worth."

That's circular reasoning, no? True in every single case, and therefore by definition excludes the notion of a manipulated price.
And your example is very different from mine and you know it, in mine people are putting in bids hoping they don't win, for the purpose of driving up the price. Classic market manipulation in my opinion. Making bidders think someone else really wants the card at a higher price. Whether it's OK or not is a different question of course, my only point is under those circumstances I would question whether the final price is manipulated or not as opposed to reflecting some concept of a market price.

[Mark17]

Originally Posted by Peter_Spaeth

That's circular reasoning, no?
And your example is very different from mine and you know it, in mine people are putting in bids hoping they don't win, for the purpose of driving up the price. Classic market manipulation in my opinion. Making bidders think someone else really wants the card at a higher price.

If a card is at auction and a shill bidder bids $120, the message he's sending is that the card is worth $120 to him. He is hoping someone will think it is worth $130, but he is not telling people that.

However, if a dealer lists a card at $130, he is saying that is the price it will take to acquire it from him, implying that is its value.

Originally Posted by Peter_Spaeth

Whether it's OK or not is a different question of course, my only point is under those circumstances I would question whether the final price is manipulated or not.

Shill bidding is not an acceptable tactic. But a shill bidder is hoping to get someone to pay $130 for that card. A dealer revising his ebay listing, jacking their ask price up to $130 is trying to get someone to pay $130 for the card. Either way, if someone is looking at that card and willingly decides he will pay $130 for it, then there you have it.

Examining the motivation of an under bidder in an auction doesn't change the reality that the card voluntarily transacted at $130.

[Peter_Spaeth]

Originally Posted by Mark17

If a card is at auction and a shill bidder bids $120, the message he's sending is that the card is worth $120 to him. He is hoping someone will think it is worth $130, but he is not telling people that.

However, if a dealer lists a card at $130, he is saying that is the price it will take to acquire it from him, implying that is its value.



Shill bidding is not an acceptable tactic. But a shill bidder is hoping to get someone to pay $130 for that card. A dealer revising his ebay listing, jacking their ask price up to $130 is trying to get someone to pay $130 for the card. Either way, if someone is looking at that card and willingly decides he will pay $130 for it, then there you have it.

Examining the motivation of an under bidder in an auction doesn't change the reality that the card voluntarily transacted at $130.

The difference to me is that inflated fixed prices are rampant, people tend to ignore them, whereas in the context of an auction, bidders (rightly or wrongly) assume all bids are made in good faith and not for the purpose of sending a false signal to the market.

So if I saw a BIN of 130 I would probably think oh eff the seller, whereas in an auction if I saw the current bid at 120 I might well think oh the price of this card is going up I guess I should go to 130.

[Snowman]

I changed my mind. I don't care if you know my name. It's Travis, but most people call me TJ. I just updated my profile with the cryptic version of my name so nobody thinks I'm some shill or something like that. I don't work in the sports card industry and never have. I'm just a random collector like most everyone else.

[Arazi4442]

Originally Posted by Snowman

I changed my mind. I don't care if you know my name. It's Travis, but most people call me TJ. I just updated my profile with the cryptic version of my name so nobody thinks I'm some shill or something like that. I don't work in the sports card industry and never have. I'm just a random collector like most everyone else.

So your name is TJ Troll?

[bnorth]

Originally Posted by Arazi4442

So your name is TJ Troll?

LOL, That is what I seen at first also. Here I thought his name started with a M.

[Snowman]

Originally Posted by Arazi4442

So your name is TJ Troll?

LOL. No. That's an 'a' and an 'i'... Trail, as in hiking trail.

[Arazi4442]

Originally Posted by Snowman

LOL. No. That's an 'a' and an 'i'... Trail, as in hiking trail.

What a shame, that would have been fantastic.

Welcome to the board!

[BobC]

Originally Posted by Peter_Spaeth

If I understand your point, I think the answer is no. People pay based on what other people are bidding and what a card has sold for. Take a single auction. I own ten other examples of the card being offered, which has sold before for 100 max. I hope to push up the price so as to unload some of mine, so I bid 125, hoping a "legitimate" buyer thinks it's a real bid and that the card is going up, and tops me at 130. Odds are I will hook at least one such buyer. I do this gradually over time with 5 more examples and eventually the price of the card gets to 200. I would call that a manipulated price, not a new true one. And I haven't won any.

Peter, don't disagree with you at all, but at the end of the day, if all those people went ahead and ended up bidding more for those cards than you, then isn't that in fact what they ended up being willing to pay for them, which to me is the definition of true FMV? No one twisted their arms to pay that much, did they? The fact that you put in higher bids yourself, tell me, had you ended up winning one of those auctions wouldn't you have paid for the card? I'm sure you would, and probably stopped there and quit bidding any more on that card, right? Now, while you had helped to raise what people would pay for that card, you did nothing wrong or illegal either. Plus, there's no guarantee that you'll profit all that much when you go to sell because all those buyers now had the card they had wanted so chances are they wouldn't be out there bidding on more of them, and you wouldn't still be bidding your own cards up in price. The demand may have dried up some, but at least you actions showed what others are willing to pay for that card, which is a truer indicator of that card's FMV, at least at that point in time.

And isn't manipulating consumers to feel that the perceived value of an item is more than it really is a major, accepted part of business and marketing? Just look at how much more brand name items usually sell for over generic/house brands, yet in many cases they may all be produced by the same manufacturer. Or from the sports side, are the basketball shoes endorsed by a particular superstar really that much better than, and therefore worth so much more than, another pair of BB shoes that doesn't have to pay a superstar to advertise them?

Not saying it may not seem morally deficient to some to try and manipulate prices like you suggested, but it happens everyday in the marketplace. So I hate to say it, but it is up to consumers to educate themselves and determine their own value for things and what they are willing to pay for them. As it says on the BST forum, caveat emptor.

[Peter_Spaeth]

So Bob and Mark, were the victims of shill bidding in Mastro at fault themselves for overpaying?

[Mark17]

Originally Posted by Peter_Spaeth

So Bob and Mark, were the victims of shill bidding in Mastro at fault themselves for overpaying?

Are you yet again trying to put words in my mouth? I repeat, shill bidding is not okay. Please stop putting me in a position of having to defend my integrity (this time vs. Bill Mastro's illegal activities.)

In general, and this applies to everything, from cards to non fungible artwork to houseboats: If someone voluntarily pays some amount for some non-essential item, then, by definition, they are voluntarily choosing to pay that amount for that item. "Overpaying" is defined by the bidder, who is voluntarily choosing to pay that amount.

Is a dealer offering the card in your previous example for $150 being fair? Is the guy who buys it "over paying?" I say, that's for the buyer to decide. If he thinks the price is too high, walk away.

[Peter_Spaeth]

Originally Posted by Mark17

Are you yet again trying to put words in my mouth? I repeat, shill bidding is not okay. Please stop putting me in a position of having to defend my integrity (this time vs. Bill Mastro's illegal activities.)

In general, and this applies to everything, from cards to non fungible artwork to houseboats: If someone voluntarily pays some amount for some non-essential item, then, by definition, they are voluntarily choosing to pay that amount for that item. "Overpaying" is defined by the bidder, who is voluntarily choosing to pay that amount.

Is a dealer offering the card in your previous example for $150 being fair? Is the guy who buys it "over paying?" I say, that's for the buyer to decide. If he thinks the price is too high, walk away.

Stop overreacting, I never said you condoned shill bidding or questioned your integrity, I am asking from a price perspective if you think the winners were manipulated or manipulated themselves. In my example where I was shill bid you said I manipulated myself, so it's a fair question.

[Peter_Spaeth]

What about price-fixing, Mark? Prices for some non-essential good are fixed by the two dominant firms. People voluntarily pay the inflated fixed price. So was it a market price or a manipulated price?

[Mark17]

Originally Posted by Peter_Spaeth

Stop overreacting, I never said you condoned shill bidding or questioned your integrity, I am asking from a price perspective if you think the winners were manipulated or manipulated themselves. In my example where I was shill bid you said I manipulated myself, so it's a fair question.

If someone had access to bidders' secret maximum bids and manipulated them upwards, that would be a completely different scenario than what we have been discussing, and that would certainly result in artificially inflated prices.

[Peter_Spaeth]

Originally Posted by Mark17

If someone had access to bidders' secret maximum bids and manipulated them upwards, that would be a completely different scenario than what we have been discussing, and that would certainly result in artificially inflated prices.

Why? They paid voluntarily. Nobody made them leave a ceiling bid.
But beyond that, that describes only a small part of the transactions identified in Mastro. Most were people placing bids with the intention of driving up the price and, allegedly, as a result the winners paid more, just like my example where you said I manipulated myself.

[Peter_Spaeth]

Originally Posted by Mark17

If someone had access to bidders' secret maximum bids and manipulated them upwards, that would be a completely different scenario than what we have been discussing, and that would certainly result in artificially inflated prices.

Why isn't someone placing a bid in my example with the intention of driving up the price and making me pay more just as artificial?

[BobC]

Originally Posted by Peter_Spaeth

So Bob and Mark, were the victims of shill bidding in Mastro at fault themselves for overpaying?

Peter, I agree with you wholeheartedly that that was wrong. However, by doing what they did, it ended up showing what many bidders had set as their max amounts to pay, which I think is a more accurate indicator of true FMV for a lot of those items being auctioned. I am definitely against shill bidding and market manipulation as well, and only reference it as it tends to end up showing the max amount someone was willing to pay. Do not condone or support any of those shenanigans at all.

The difference I'm talking about relates to differences in how people perceive FMV for a a particular card. It seems that a very common, accepted thinking is to look at recent past auction and Ebay data as current market value indicators, which it most certainly helps point to. But I'm also saying you can't just look at the last auction sale and emphatically state that is the current market for a specific card. There are too many variables, as I've already alluded to in previous posts, and that the majority of thinking seems to base a card's value not on the most someone will pay, but the second most someone who just happens to be participating in that particular auction will pay. I don't feel that thinking is all that accurate, plus by following that thinking it makes someone more susceptible to being taken in by the adverse effects of shilling and market manipulation.

Another thing with the recent surging in card prices is the volatility in prices on almost a daily basis it seems anymore. So to base decisions on past transactions may not be that smart. I think about how they price gasoline at the pump. My understanding is the price you pay is what they expect it will take to replace the gallon of gas you just bought, and is altogether not based on the actual cost of the gas you just pumped. So if you know someone was willing to pay $100 for a card that recently had a reported sale at $50, that might prove helpful in knowing the next time that same card comes up for sale or auction. Doesn't necessarily protect you from shill bidding and market manipulation, but at least gives you more information on which to decide for yourself what to pay for a card you are interested in.

I've never said being manipulated into overpaying for a card at auction is right. But it doesn't change the fact of what someone was willing to pay, which indicates what their perception of a card's FMV was. I feel you have to look at your own finances and card needs/wishes in deciding what your own perceived value of a card is, and bid/pay accordingly. Go back and look at that recent thread about the M101-2 Sporting News Supplements in the last Memory Lane auction about some truly head scratching prices paid to see an example of what I'm talking about. Can't believe those are sustainable prices given my knowledge about that issue and what else is out there, but can also believe many people just looking at those most recent sales to determine FMV will believe those are now gospel. I am strictly a collector though, and these flippers/investors taking over the market have their own needs and ways of looking at things such as FMV, and good for them. I have already concluded there are a good many sets I'll never complete now because I won't pay the asking prices today of many of the key cards I'm still missing. Time will tell.

[Peter_Spaeth]

Why is FMV in your example only defined by the one human being willing to pay the most? Suppose a card in auction where one guy puts in a ceiling of 100, the next highest real bid is 50, and the auctioneer drives it up to 100. Nobody else on earth thought it was worth more than 50. So did one guy, assisted by the criminal auctioneer, now define a new FMV?

[BobC]

Originally Posted by Peter_Spaeth

Why is FMV in your example only defined by the one human being willing to pay the most? Suppose a card in auction where one guy puts in a ceiling of 100, the next highest real bid is 50, and the auctioneer drives it up to 100. Nobody else on earth thought it was worth more than 50. So did one guy, assisted by the criminal auctioneer, now define a new FMV?

Didn't say it defines it, just that you need to consider it as maybe a more true reflection of FMV, as opposed to simply accepting the underbidder as setting the market value. There's no way to know that high bidder is a sole outlier, or if for whatever reason a number of serious and financially capable collectors who maybe wanted that same card as much as, or more than, the evental winner, didn't even know of the auction or couldn't participate in it.

Peter, in your example when you say no one else on Earth thought that particular card was worth more than $50, you are literally assuming that every person on the planet looked at the auction, and passed on that card. I would guess that most auctions have several hundred to maybe a few thousand bidders in them, at most. I would speculate that not every auction house or dealer has access to every possible collector that is out there. Heck, I've been collecting for 30+ years and can't begin to tell you how many auctions I've never looked at or bid in, and I know I'm not alone in that. So that is why I'm saying past auction sales can be a good indicator towards what a card's current FMV is, but shouldn't always be taken as the only major component or as a sole final answer. You even responded to someone on how you set prices for cards you put on the BST forum and said yourself you don't just look at recent auction sales, so basically we have agreed all along. Just maybe a differecnce in the weighting of factors you may choose to look at. Again, to me the definition of FMV is what a willing buyer agrees to pay an unrelated and willing seller for an item in an open, arms length transaction. Not what an underbidder was willing to pay in a particular auction.

[Snowman]

Originally Posted by BobC

Didn't say it defines it, just that you need to consider it as maybe a more true reflection of FMV, as opposed to simply accepting the underbidder as setting the market value. There's no way to know that high bidder is a sole outlier, of if for whatever reason a number of serious and financially capable collectors who maybe wanted that same card as much as, or more than, the evental winner, didn't even know of the auction or couldn't participate in it.

Peter, in your example when you say no one else on Earth thought that particular card was worth more than $50, you are literally assuming that every person on the planet looked at the auction, and passed on that card. I would guess that most auctions have several hundred to maybe a few thousand bidders in them, at most. I would speculate that not every auction house or dealer has access to every possible collector that is out there. Heck, I've been collecting for 30+ years and can't begin to tell you how many auctions I've never looked at or bid in, and I know I'm not alone in that. So that is why I'm saying past auction sales can be a good indicator towards what a card's current FMV is, but shouldn't always be taken as the only major component or as a sole final answer. You even responded to someone on how you set prices for cards you put on the BST forum and said yourself you don't just look at recent auction sales, so basically we have agreed all along. Just maybe a differecnce in the weighting of factors you may choose to look at. Again, to me the definition of FMV is what a willing buyer agrees to pay an unrelated and willing seller for an item in an open, arms length transaction. Not what an underbidder was willing to pay in a particular auction.

I think this is a good point about auctions not always being a good measure of the true market value of an item. It really depends on what that item is and how much current demand and supply exist in the marketplace. For something that gets traded often with both abundant supply and demand like a Shohei Ohtani Topps Chrome rookie card, recent auction prices are a pretty good predictor of what the next one will sell for because there are enough buyers out there for the card to be reliably bid up to its full potential, but also enough copies of the card to ensure that if someone misses out on it they won't be upset because they can easily just buy the next one.

However, for cards that are more rare, or that have a much smaller market, like say cards that sell for between 5k-25k, an auction is usually a terrible way to sell it unless you're really hard up for cash. You could make a pretty good living just by buying rare cards like these at auction and then selling them as 'buy-it-now' options if you're patient enough to wait for the right buyers to come along later. It's pretty common for a 20k card to only sell for 15k at auction because it just didn't happen to get enough exposure that particular week. For the really high end cards though, say 25k+, those usually get enough exposure from the large auction houses for auctions to bring in true market values again. But I would almost never sell a rare 10k card at auction on eBay without setting a reserve price. The risk that it sells below market is just way too high.