Most commonly referenced on
eBay, shill bidding is when the seller of an item has a third
party bid on their item solely with the intent of driving the price up and not for the purpose of buying the product.
Shill bidding is very
popular with items such as cars and electronics. Individuals involved in shill bidding can sometimes be spotted on sites such as
eBay by looking through a buyers betting
history and comparing the number of items bet on compared with the number of items won (typically the number of items won is extremely lower than items bet on).
Normally a shill bidder is either a friend of the seller, a paid associate, or simply just a separate personal account of the seller. Shill bidding can be successful for its purpose due to the fact that if the third
party shill bidding is the winner of the auction, he/she
will simply be reimbursed by the seller for the purchase price and a re-listing of the item may occur.
Shill bidding can result in legal action if a serious enough infringement and/or a series of infringements occur.
Mike wanted to sell his car on
eBay but he worried that the selling price might be lower than what he'd hoped, so he made sure
two of his
friends were shill bidding on it to help him out.