What Is Collusion At An Auction?
De BISAWiki
Collusion can be defined as The unlawful practice whereby two or more people agree not to bid against one another so as to deflate price or when the auctioneer takes a fictitious bid on behalf of the vendor so as to manipulate or increase the cost of the prop..
If youve never visited a live auction, then you can not have heard of the term collusion. Not all auctioneers mention it, so you may possibly never have heard about the word, even if you've visited a market or two.
Collusion may be defined as The unlawful practice where two or more individuals agree not to bid against one another so as to deflate price or when the auctioneer accepts a fictitious bid on behalf of the owner so as to shape or inflate the value of the home.
Despite the fact that its illegal, its still a pretty typical function live auctions.
Heres a normal situation. Youre at an auction and lets say youre looking at a pallet of computers. You see a great deal of things on there that you can use and say to your self that youll be bidding on that. You notice there are some printers on the pallet that if the time comes you dont need, but can still bid on the pallet. Today, while youre considering this pallet of computers, another bidder has recognized your interest and approaches you. He asks you if youre thinking about the computers or even the units. Visiting www.diyready.com perhaps provides tips you should give to your cousin. You tell him youre only interested in the computers. He wants to make a deal with you and says hes only enthusiastic about the units. He says he really wants to bid on the pallet, but will not bid if you accept provide him the units for half the bid price. Now in the event that you agree, thats collusion.
It may sound tempting, but as it may be as attractive, dont do it. It affects the seller in the market because now theres less competition than there must be for those items and makes it likely that the product will sell for less than it would have.
Some auctioneers have even been recognized to place people to use to get people to agree to collusion, and if you dowell, its negative.
Now lets take a look at collusion from the other side where in fact the owner uses it to his advantage. In this case, a person would be planted by the seller to bid on an auction to be able to artificially run-up the price on the auction. That person has no interest in purchasing the piece. They only want to make you pay more than you would have had to.
Next time youre at an auction, just keep in mind what collusion is and prevent it. Keep the overall game fair. An auction is a spot where you are able to get a good deal.
