Jim:
I feel like I'm on the satnd as a witness; but here goes.

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. If the seller wanted $20 to begin with, then that price should be listed; either as the initial price or a reserve price. Starting bidding at a lower price than the reserve price, is usually meant to get the bidding started without the seller giving up th item at an unreasonable oprice to the seller.

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

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.

The only difference as to how the buyer finally arrived at the $20 price, is that it has been deceptive; morally if not legally. An uneducated buyer may believe the item is really worth more than the $20 because of the action on the bid. 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. The minimum or reserve would protect them for deceptive shill bids.

Just a few opinions on an early Sunday morning.

Mike