Suspicious Bidding Practices
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Maybe this has been covered before (couldn't really find anything in the archives though), but there are a few auction houses, who shall remain nameless, who use the practice of extended bidding.  So if you bid in the last minute or so of the auction, it automatically extends the auction for a set amount of time (minutes to hours longer).  I just won an item through one of these auction houses.  I put my bid in with about 20 seconds to go - not realizing that they were going to extend.  Once entered, mine was the highest bid at that point - and not much higher than the prior bid.  The auction was then extended a few minutes, and suddenly, within that extended period, the bid increased by about 45% - quite a bit higher than my current bid, but just below my max bid.

I thought that was strange - if someone had that level of interest, why hadn't they bid in the last seconds as I did?  It seems very fishy to me.  With this kind of bidding practice, what's to stop the auction house from going in during those extended minutes and pushing up everyone's bid to below the max?  It's an easy revenue stream.  I don't think that's legal, but I think I read long ago that Heritage was set up in Texas because it was one of the states that allows the auction house to bid on their own auctions.  They don't do the extended bidding period, so it's probably less likely that they do that.  But, with these other auction houses, you have to wonder.

Anybody have thoughts on this?  Do you avoid these types of auctions?  It certainly makes me uneasy and suspicious.

Regards,

Tony

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7 minutes ago, comicinkking.com said:

Maybe this has been covered before (couldn't really find anything in the archives though), but there are a few auction houses, who shall remain nameless, who use the practice of extended bidding.  So if you bid in the last minute or so of the auction, it automatically extends the auction for a set amount of time (minutes to hours longer).  I just won an item through one of these auction houses.  I put my bid in with about 20 seconds to go - not realizing that they were going to extend.  Once entered, mine was the highest bid at that point - and not much higher than the prior bid.  The auction was then extended a few minutes, and suddenly, within that extended period, the bid increased by about 45% - quite a bit higher than my current bid, but just below my max bid.

I thought that was strange - if someone had that level of interest, why hadn't they bid in the last seconds as I did?  It seems very fishy to me.  With this kind of bidding practice, what's to stop the auction house from going in during those extended minutes and pushing up everyone's bid to below the max?  It's an easy revenue stream.  I don't think that's legal, but I think I read long ago that Heritage was set up in Texas because it was one of the states that allows the auction house to bid on their own auctions.  They don't do the extended bidding period, so it's probably less likely that they do that.  But, with these other auction houses, you have to wonder.

Anybody have thoughts on this?  Do you avoid these types of auctions?  It certainly makes me uneasy and suspicious.

Regards,

Tony

This behavior is intended to A) prevent sniping and therefore B) theoretically maximize closing prices.


With regards to your suspicions, who knows? I work in software, and there is so little regulation in online marketplaces that I've always been amazed that online auctions (perhaps most tamper friendly format for a marketplace?) have grown so huge. Maybe it was a chandelier bid hm

 

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I bought a few items in the recent Hakes auction and they do this.  It was a little annoying as I kept having to wait for the auctions to close.  However, no one placed any bids during the extended period, so it didn't really make a difference.  I presume you're talking about tonight's Comic Connect auction.  Honestly I think some people just check the site late or are looking for last minute deals.  I'll sometimes place late bids on items that seem like bargains. 

I think It would be tough for an auction house to get away with fake bidding at the last  minute and extremely risky from a reputation perspective.  Maybe I'm naive, but I doubt any of the major players are doing this.

 

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1 hour ago, comicinkking.com said:

Maybe this has been covered before (couldn't really find anything in the archives though), but there are a few auction houses, who shall remain nameless, who use the practice of extended bidding.  So if you bid in the last minute or so of the auction, it automatically extends the auction for a set amount of time (minutes to hours longer).  I just won an item through one of these auction houses.  I put my bid in with about 20 seconds to go - not realizing that they were going to extend.  Once entered, mine was the highest bid at that point - and not much higher than the prior bid.  The auction was then extended a few minutes, and suddenly, within that extended period, the bid increased by about 45% - quite a bit higher than my current bid, but just below my max bid.

I thought that was strange - if someone had that level of interest, why hadn't they bid in the last seconds as I did?  It seems very fishy to me.  With this kind of bidding practice, what's to stop the auction house from going in during those extended minutes and pushing up everyone's bid to below the max?  It's an easy revenue stream.  I don't think that's legal, but I think I read long ago that Heritage was set up in Texas because it was one of the states that allows the auction house to bid on their own auctions.  They don't do the extended bidding period, so it's probably less likely that they do that.  But, with these other auction houses, you have to wonder.

Anybody have thoughts on this?  Do you avoid these types of auctions?  It certainly makes me uneasy and suspicious.

Regards,

Tony

I'm assuming you're talking about Comic Connect since their auctions ended tonight.

I put in my high bid early and didn't attempt to snipe.

Turned out my high bid was triple what it hammered for.

If they wanted to bid me up and cheat, they could have, but didn't.

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37 minutes ago, RabidFerret said:

I'm assuming you're talking about Comic Connect since their auctions ended tonight.

I put in my high bid early and didn't attempt to snipe.

Turned out my high bid was triple what it hammered for.

If they wanted to bid me up and cheat, they could have, but didn't.

Agreed - I won something tonight in a similar manner, having placed my high bid days ago.  It hammered at under half my max bid.  

 

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5 hours ago, comicinkking.com said:

Very happy to hear those last few responses. I guess I just got unlucky. Getting cynical in my old age... :o

"Getting realistic...."--you never know.

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I would like to add a reminder.  There are auction houses which disclose in their terms that they may bid on their own auctions.  (Heritage, e.g.)

There might not be any restrictions against friends and family putting in protective bids.  (eBay, e.g.)

Some venues simply take your bid in its entirety without offering proxy bidding.  (Live Auctioneers, e.g.)

So, read fine print and prepare to pay all of your bid.

Plus the vig (buyer's premium), and shipping.

Happy hunting, David S. Albright

Edited by aokartman
clarity

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9 hours ago, Callaway29 said:

I just participated in a CC auction for the first time and wow...I'm NOT a fan of extended bidding...at all. :tonofbricks:

My suspicion is that, despite contrary opinion, proxy bidding w/o time extensions results in higher bidding prices.

With proxy bidding, bidders know that there is an undisclosed amount another bidder could post to win a bid. Furthermore, bidders know that the deadline to consider bids is firm. Since one can never be sure if they will get a bid in before the deadline, they would logically bid their highest possible proxy amount as protection. If more than one bidder does this, than the highest proxy will not only win, but be higher than a bidding arrangement where the time is extended. That's because in the latter situation, a person may think he can make his/her bid higher later so the bidder will intuitively hold back (allowing second thoughts to creep in).

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2 hours ago, Rick2you2 said:

My suspicion is that, despite contrary opinion, proxy bidding w/o time extensions results in higher bidding prices.

With proxy bidding, bidders know that there is an undisclosed amount another bidder could post to win a bid. Furthermore, bidders know that the deadline to consider bids is firm. Since one can never be sure if they will get a bid in before the deadline, they would logically bid their highest possible proxy amount as protection. If more than one bidder does this, than the highest proxy will not only win, but be higher than a bidding arrangement where the time is extended. That's because in the latter situation, a person may think he can make his/her bid higher later so the bidder will intuitively hold back (allowing second thoughts to creep in).

I find your argument quite rational, and likely correct as far as bidding w/o time extensions. But while second thoughts will arise with extended bidding, the second thoughts do not lead to holding back but rather to going to bids higher than what was originally intended (auction fever). That is while live auctions go on until no more bids are offered.

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19 hours ago, hmendryk said:

I find your argument quite rational, and likely correct as far as bidding w/o time extensions. But while second thoughts will arise with extended bidding, the second thoughts do not lead to holding back but rather to going to bids higher than what was originally intended (auction fever). That is while live auctions go on until no more bids are offered.

The difference is that with live auctions, you have "crowd fever." It isn't quite the same when you are just posting bids on the computer. The numbers flash by, but there isn't the same sense of excitement. 

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One difference between live bidding vs extended bidding is that extended bidding gives more time for the other bidder(s) to decide to bid higher where with live bidding you have much less time to make a decision.  Regarding pieces I have posted on CAF that I won in a HA auction, I have been contacted at least 5-10 times with sentiments such as "I was really thinking of bidding higher on this piece but the lot closed before I could pull the trigger on another bid and now I really regret not bidding higher."  On the flip side, live bidding can leave to a feeding frenzy of bids where if bidders had more time to think they may not have kept bidding higher and higher.  

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