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Cheating in auction

Cheating is achieving some goals with dishonest means. It occurs in many areas, including auction, especially online auction. Either a bidder or an auctioneer could cheat in auction. For example, a bidder can bid on the same item multiple times with different aliases online. This is called Multiple bidding. Another way of cheating is bid shading: the bidder is able to find out (using unfair means) the bids from other people and change his/her own bid to minimize the cost. Several bidders can collude in auction, which is called rings. However, they do not compete with each other or try to raise the price.

Auctioneers can cheat as well. One can have fake bidders, which are called “shills” to participate in the auction and purposely raise the price of the item. This is known as shill bidding. Another way of cheating for sellers is called “false bids”, which occurs in second-bid auction. The seller purposely looks at the bids and sends in a bid that’s slightly lower than the highest bid. So the winner would pay the value of that false bid.

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Jenamani, Mamata et al. “Cheating in online auction -Towards explaining the popularity¬†of English auction”, Science Direct. March 2006.¬†https://www.cs.purdue.edu/homes/bb/shillCounteractingbidding.pdf

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