... Michael, if made you "feel like I'm on the stand as a witness". We trial lawyers REALLY like to cross-examine witnesses! <g>

>> A buyer may be harmed because I understand an auction to be what arms-length buyers would be willing to pay for an item. If there is a shill bidder, then the auction does not represent the true value of the item. <<

Why not? In the example I gave, the true value to Billy Bobb is $20, which may or may not be what you or I would pay for the same item. Let's change my hypothetical question a little and say that the fair market value of the item involved is $40. Billy Bobb got it for $20 under either scenario. You'd be right; the auction would NOT represent the true value of the item; it would be way under priced. How is Billy Bobb harmed?

>> If the seller wanted $20 to begin with, then that price should be listed; either as the initial price or a reserve price. <<

Well, that's an opinion, not a statement of fact. WHY should it be done that way? What is the difference between setting an initial minimum bid of $20, a starting bid of $1 with a hidden reserve of $20 and using a shill to raise the bidding to $20, at which point the shill drops out? The result is the same in all three cases -- the buyer cannot obtain the item for less than $20. How is the buyer harmed any more by the shill bidding than he is by the higher minimum bid or the hidden reserve?

>> Starting bidding at a lower price than the reserve price, is usually meant to get the bidding started without the seller giving up the item at an unreasonable price to the seller. <<

I agree completely; doesn't the use of a shill bidder accomplish EXACTLY THE SAME RESULT?

>> Is the buyer actually harmed by the shill bid if he/she is willing to buy the item at $20 (in your example), no and yes. No because he would have bid that amount if the minimum or reserve were set at that price. <<

Correct.

>> Yes because there is no reflection of the true market for the item. <<

As I said above, that may or may not be true. BUT, if it is not true, then setting a minimum bid of $20 or having a hidden reserve of $20 would also be "no reflection of the true market for the item". Which brings me back to the main point --- WHAT IS THE REAL DIFFERENCE? The end result is the same in all three cases, whether it reflects fair market value or not.

>> I personally think shill bidding should be illegal. The use of a miniumum or reserve would protect the seller and not harm any buyer who is willing to pay that minimum or reserve price. <<

WHY, Michael? Isn't the shill bid really just another way of imposing a hidden reserve (the only difference being that you aren't told up front that there IS reserve). And even on eBay (which I'm not really discussing here <g>), when there is a reserve, the buyer still doesn't know how much that reserve is unless the seller is willing to reveal it privately. Which means that, essentially, you are still bidding against the seller. Just that every time you bid something less than the reserve, the seller gets an AUTOMATIC shill bid which prevents you from obtaining the item at the price you bid.

>> The only difference as to how the buyer finally arrived at the $20 price, is that it has been deceptive; morally if not legally. <<

There's one of those "ethical" or "moral" statements which doesn't answer the question WHY?

>> An uneducated buyer may believe the item is really worth more than the $20 because of the action on the bid. <<

I'm not sure I agree with that; but let's assume for the moment that it's true. Wouldn't the same uneducated buyer believe that an item with a minimum bid is really worth more than the minimum bid? Otherwise, as I asked Jim Episale, why have an auction at all; just offer the item for the stated price in a straight out sale.

>> Granted, "caveat emptor" is the rule, but as we have seen with some chips (i.e. fantasy; James Bond) there are uneducated buyers out there. <<

I HATE the concept of "caveat emptor" (and it really ISN'T the rule with respect to FRAUDULENT claims in any event; fraud IS against the law). There is a huge difference, between calling a fantasy chip a real casino chip (which is a false statement of fact and therefore fraudulent) and placing a low minimum bid on an item worth more than that minimum (which misrepresents absolutely nothing).

>> The minimum or reserve would protect them from deceptive shill bids. <<

How does a minimum or reserve bid protect anyone from shill bids, deceptive or otherwise? Couldn't the seller, after a bidder has placed the minimum bid or reached the reserve, still enter a higher shill bid? I'm not sure what you mean by this statement. In any event, you are assuming (again) that a shill bid is "deceptive". How? Why? What is it saying to the bidder that is FALSE? And even if you believe that it implies that the item is worth more than the bidder's previous bid, it implies nothing about whether the item is worth more than the shill bid. The bidder STILL has the option to pass on the item rather than raising the bid again.

Please understand, Michael, I am not trying to pick on you here or to belittle your opinions. I appreciate the fact that you took up my Devil's Gauntlet and are willing to engage in a spirited discourse on this touchy subject.

Should also have mentioned in my original post that, in fairness, I WILL provide my answers to all of the questions I posed before the thread dies, either in my responses to other posts or in a conclusory post. ----- jim o\-S