Working with fellow collector in auction

[Schatzy]

Well I have a quick question/discussion!!

Have you ever worked with another serious collector that you know both of you are going to bid on a certain coin.

Recently me and another collector got together and decided I would bid on 2 coin and he would bid on the other

2 coins. Both of us wanted all 4 coins but we though what is the point bidding against each other.

 

I was just curious if anyone else has done this.

[okbustchaser]

Well, other than the fact that it is called collusion and in most states is a felony.....

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes.

[michael]

Well, other than the fact that it is called collusion and in most states is a felony.....

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes.

 

 

ABSOLUTELY CORRECT

 

and a low class thing to do with no integrity

[James_OldeTowne]

Well, other than the fact that it is called collusion and in most states is a felony.....

 

Yes.

I do it on an "as required" basis.

 

OOPS, did you say collusion? I always thought they were saying CONFUSION was illegal !

 

ABSOLUTELY CORRECT

 

and a low class thing to do with no integrity

This is one of the rare times where michael and I disagree.

 

I have often dropped out of bidding on something when I saw that someone I know (and it's almost always someone from my local coin club) is chasing a coin that I was after as well. Ultimately, it's only a hobby to me, and I love to see my friends able to add coins to their collections at a palatable cost.

 

Now, if it's business competition, then the gloves come off.

[bsshog40]

Never been in this position, but to me it would depend how good of friend or co-collector the other collector was to me. Then, if a good friend, then I guess I would ask which coins were needed more by him and yourself and hopefully come to a point where both would be satisfied.

[cpm9ball]

It wouldn't be considered collusion because they would not be working together in an attempt to deceive or defraud anyone, and since it is an open auctioon, there would be no price-fixing or attempt to restrict or divide the market for the benefit of both parties.

 

Chris

[Schatzy]

Okay how is it collusion!!

 

If the coins are at a major auction house.

Both me and a fellow collector don't know the seller.

Both me and a fellow collector knew that we would both be chasing the same coins

So we decided that he would bid on x1 & x2 coin and I would bid on x3 & x4 coin.

We both agreed not to bid against each other.

 

How is there anything wrong with what we are doing?

 

[Walkerfan]

Okay how is it collusion!!

 

If the coins are at a major auction house.

Both me and a fellow collector don't know the seller.

Both me and a fellow collector knew that we would both be chasing the same coins

So we decided that he would bid on x1 & x2 coin and I would bid on x3 & x4 coin.

We both agreed not to bid against each other.

 

How is there anything wrong with what we are doing?

 

Yes. I don't see it either.

[$ilverHawk]

Absolutely correct. Collusion def. "A secret agreement between two or more parties for a fraudulent, illegal or deceitful purpose."

 

An agreement by two parties not to bid against each other is not fraudulent, illegal or deceitful as long as there are other parties able to bid and not involved in the agreement. The important fact is agreeing not to bid against each other. As opposed to driving up the auction price.

 

The only collusion that I see as possible in an open auction format is between the auctioneer and a favored bidder. That can and does happen. In most auctions, the auctioneer has final say on the acceptance of a bid.

 

Due to the power of the auctioneer, there can be collusion and an outcome that may not be fair to all bidders.

 

$ilverHawk

[bsshog40]

Okay how is it collusion!!

 

If the coins are at a major auction house.

Both me and a fellow collector don't know the seller.

Both me and a fellow collector knew that we would both be chasing the same coins

So we decided that he would bid on x1 & x2 coin and I would bid on x3 & x4 coin.

We both agreed not to bid against each other.

 

How is there anything wrong with what we are doing?

No "collusion" there! I see "mutual agreement" amongst collectors!

[okbustchaser]

You are indeed colluding in an effort to hold down the hammer price. By agreeing not to bid on an item simply because a friend is going to you remove one of the necessary components of a free auction, ie competition.

[physics-fan3.14]

I see it more as cooperating than colluding. I see nothing wrong with it, unless you are bidding on my auction. I have done it before.

[$ilverHawk]

You are discounting the actions of many other potential bidders that have not entered into an agreement not to bid on an item.

 

While two parties may agree not to bid against each other, that in no way stops third parties from bidding on the auction.

 

You are imaging a very low population of third party bidders. Ever hear of "sniping"?

 

This is really a total non issue in an open auction format. Two bidders in no way can manipulate an auction outcome by declining to bid against each other, unless as I as stated in a previous post that they are the only bidders.

 

PS : I have no problem telling fellow collectors what coins I am bidding on in major auctions. I don't mind a little friendly competition, but I appreciate a little deference when my fellow collectors know that I am really fixated on a particular lot.

 

$ilverHawk

[tejas1836]

 

 

 

If you know the amount you are willing to pay for coins 1 & 2 is more than what the other collector is willing to pay, you could lay off bidding on the next increment above your friend's maximum bids to give him a chance to win them.

 

However, if another bidder bid the next increment above his maximum bids, it seems to me you should try and win the coins at your maximum bids.

[Walkerfan]

 

 

If you know the amount you are willing to pay for coins 1 & 2 is more than what the other collector is willing to pay, you could lay off bidding on the next increment above your friend's maximum bids to give him a chance to win them.

 

However, if another bidder bid the next increment above his maximum bids, it seems to me you should try and win the coins at your maximum bids.

 

Assuming that you are willing to pay more, then yes, this would work. As soon as it goes above your buddy's max, then you'll know another bidder has entered the scene, then game on and duel it out with him. ::

[coinman_23885]

Well, other than the fact that it is called collusion and in most states is a felony...

 

Collusion refers to any agreement to defraud another or to obtain something forbidden by law. See 281 Black's Law Dictionary (8th ed. 2004). There is nothing inherently fraudulent or illegal about refraining from entering a bidding war with a fellow collector, and it is in fact a wise thing to do. Bidding wars are often the reason that some price guides are skewed; the bidders will likely never get their money back.

 

Back to Jamie's original question, I have yet to do this. I see nothing inherently unethical about any of this, and I am betting that there is not a poster on this board who has or wouldn't attempt this under the right circumstances. As long as you never bid on one of my auctions with such a strategy, I'm fine with it.

[Coindude]

Honestly, I see no problem in it at all.

[coinman_23885]

I see it more as cooperating than colluding. I see nothing wrong with it, unless you are bidding on my auction. I have done it before.

 

[Walkerfan]

It would be stupid not to. Plus if a friend tells me he is gonna bid on something, then I WILL definitely back off out of respect for him. It would be kinda sleazy to do that to a friend, anyway. That's just what I think. Unless its sumthin' we both REALLY want but that situation has yet to happen and the chances are unlikely, at this time. I wouldn't want a buddy unknowingly driving my price upward or vice-versa.

[coinman_23885]

It would be kinda sleazy to do that to a friend, anyway. That's just what I think.

 

If you want it, then it's fair game. I see nothing sleazy about outbidding a friend. I don't think that it would be wise given that it could lead to a bidding war and an inflated hammer price, but I don't think that would be unethical. Nevertheless, I'd probably allow the friend to have the coin.

[Walkerfan]

It would be kinda sleazy to do that to a friend, anyway. That's just what I think.

 

If you want it, then it's fair game. I see nothing sleazy about outbidding a friend. I don't think that it would be wise given that it could lead to a bidding war and an inflated hammer price, but I don't think that would be unethical. Nevertheless, I'd probably allow the friend to have the coin.

 

I'll buy that! (no pun intended) But as I said, it would have to be something that I REALLY WANT, otherwise, I certainly wouldn't go out of my way to do it to him/her. It would be a rare instance and has yet to happen that's why it would be smart to discuss this info w/your friend beforehand.

[Mark T]

For each Heritage auction I compare notes with a few members of this board on the coins we are bidding on. We do this so not to bid against each other.

[$ilverHawk]

Exactly, third party invovlement precludes collusion. Two bidders cannot stop a third party bidder from bidding to win the the lot.

 

I really don't get what the issue is here. Am I slow on in catching on?

 

$ilverHawk

[okbustchaser]

I understand now. It's another one of those things like cherrypicking that is only scummy if a dealer does it. As long as it's a collector who is costing the owner money it's ok.

 

 

[coinman_23885]

I understand now. It's another one of those things like cherrypicking that is only scummy if a dealer does it. As long as it's a collector who is costing the owner money it's ok.

 

 

I don't see anything wrong with it irrespective of the bidder (be it a small collector or elite, wealthy dealer). I think everyone is referencing your misunderstanding of the word collusion and the strange sense of ethical prohibition that you somehow attach to this morally acceptable practice.

 

If you find this unethical then do you view price shopping unethical? After all, it can pit dealers against each other and force high priced dealers to lower their prices, effectively costing the owner money/potential profit. As everyone has said, there are several fish in the pond so to speak, and certainly there are other bidders.

[okbustchaser]

I understand now. It's another one of those things like cherrypicking that is only scummy if a dealer does it. As long as it's a collector who is costing the owner money it's ok.

 

 

I don't see anything wrong with it irrespective of the bidder (be it a small collector or elite, wealthy dealer). I think everyone is referencing your misunderstanding of the word collusion and the strange sense of ethical prohibition that you somehow attach to this morally acceptable practice.

 

If you find this unethical then do you view price shopping unethical? After all, it can pit dealers against each other and force high priced dealers to lower their prices, effectively costing the owner money/potential profit. As everyone has said, there are several fish in the pond so to speak, and certainly there are other bidders.

 

Evidently I'm not the only one who is misunderstanding the word collusion. It is state and federal prosecutors who do since they are the ones who regularly file complaints against bidders for doing so either under the Sherman Antitrust Act (federal) or whatever version of Sherman an individual state enacted to cover it's own intrastate commerce.

 

Artificially holding a hammer price down through the use of ring bidding is every bit as illegal as artifically inflating the hammer price through the use of a shill. One must ethically endose both sides or neither.

[Keigwin]

Okay how is it collusion!!

 

If the coins are at a major auction house.

Both me and a fellow collector don't know the seller.

Both me and a fellow collector knew that we would both be chasing the same coins

So we decided that he would bid on x1 & x2 coin and I would bid on x3 & x4 coin.

We both agreed not to bid against each other.

 

How is there anything wrong with what we are doing?

Nothing wrong with your plan. Something wrong with your English.

Lance.

[Schatzy]

Okay how is it collusion!!

 

If the coins are at a major auction house.

Both me and a fellow collector don't know the seller.

Both me and a fellow collector knew that we would both be chasing the same coins

So we decided that he would bid on x1 & x2 coin and I would bid on x3 & x4 coin.

We both agreed not to bid against each other.

 

How is there anything wrong with what we are doing?

Nothing wrong with your plan. Something wrong with your English.

Lance.

 

Sorry I didn't know we were in English class

[coinman_23885]

 

I don't see anything wrong with it irrespective of the bidder (be it a small collector or elite, wealthy dealer). I think everyone is referencing your misunderstanding of the word collusion and the strange sense of ethical prohibition that you somehow attach to this morally acceptable practice.

 

If you find this unethical then do you view price shopping unethical? After all, it can pit dealers against each other and force high priced dealers to lower their prices, effectively costing the owner money/potential profit. As everyone has said, there are several fish in the pond so to speak, and certainly there are other bidders.

 

Evidently I'm not the only one who is misunderstanding the word collusion. It is state and federal prosecutors who do since they are the ones who regularly file complaints against bidders for doing so either under the Sherman Antitrust Act (federal) or whatever version of Sherman an individual state enacted to cover it's own intrastate commerce.

 

Artificially holding a hammer price down through the use of ring bidding is every bit as illegal as artifically inflating the hammer price through the use of a shill. One must ethically endose both sides or neither.

 

You should refer to the definition from Black's Law Dictionary, which is the authoritative reference in most state and federal courts across the country (and no, neither of my posts, including this one, is to be construed as legal advice). Moreover, I'd be willing to guess that there are a lot more to these prosecutions than you are letting on. I'd love to see any evidence to the contrary that matches the circumstances outlined in the original poster's post.

 

Moreover, I agree with Chris who makes several valuable and correct points. 1) there is no "intent" to deceive or defraud, thus you're missing the acteus reus (actual act) and the mens rea (intent), and the latter is usually required in criminal prosecutions (i.e. the crimes are usually not strict liability; 2) it is an open auction = no price fixing; and 3) they're not attempting to restrict or divide the market for the benefit of both parties. If the latter were true, it may very well invoke the Sherman Anti-Trust Act; however, there is no deception, no fraud, and no attempt to restrict/divide the market = no crime.

 

 

Artificially holding a hammer price down through the use of ring bidding is every bit as illegal as artifically inflating the hammer price through the use of a shill. One must ethically endose both sides or neither.

 

 

There is no way that you could compare the ethical ramifications attached to the situation outlined in the original poster's comment with shill bidding. In the latter, the seller is fraudulently increasing the bid on his own auction to levels higher than the market will generally sustain (i.e. the market price/hammer price would be lower absent the shill bid). Also note that with shill biding, there is an intent to defraud the potential bidders into believing that the market is requiring a higher price than it actually does. This is fraud, and yes this is illegal. Now compare this to the instant situation where there is no misrepresentation of fact or market condition, and there is no attempt to defraud. With this situation, a bidder is refusing to bid when he knows that another collector is going to put a very high bid on another piece, perhaps a price that will not be replicated if the two were to enter a "bidding war." This is common sense. I cannot fathom how you could possibly equate the two. It is no one else's concern about whether or not I choose to bid in an auction - the government cannot force a bid. You are comparing apples and oranges.

 

[Schatzy]

 

I don't see anything wrong with it irrespective of the bidder (be it a small collector or elite, wealthy dealer). I think everyone is referencing your misunderstanding of the word collusion and the strange sense of ethical prohibition that you somehow attach to this morally acceptable practice.

 

If you find this unethical then do you view price shopping unethical? After all, it can pit dealers against each other and force high priced dealers to lower their prices, effectively costing the owner money/potential profit. As everyone has said, there are several fish in the pond so to speak, and certainly there are other bidders.

 

Evidently I'm not the only one who is misunderstanding the word collusion. It is state and federal prosecutors who do since they are the ones who regularly file complaints against bidders for doing so either under the Sherman Antitrust Act (federal) or whatever version of Sherman an individual state enacted to cover it's own intrastate commerce.

 

Artificially holding a hammer price down through the use of ring bidding is every bit as illegal as artifically inflating the hammer price through the use of a shill. One must ethically endose both sides or neither.

 

You should refer to the definition from Black's Law Dictionary, which is the authoritative reference in most state and federal courts across the country (and no, neither of my posts, including this one, is to be construed as legal advice). Moreover, I'd be willing to guess that there are a lot more to these prosecutions than you are letting on. I'd love to see any evidence to the contrary that matches the circumstances outlined in the original poster's post.

 

Moreover, I agree with Chris who makes several valuable and correct points. 1) there is no "intent" to deceive or defraud, thus you're missing the acteus reus (actual act) and the mens rea (intent), and the latter is usually required in criminal prosecutions (i.e. the crimes are usually not strict liability; 2) it is an open auction = no price fixing; and 3) they're not attempting to restrict or divide the market for the benefit of both parties. If the latter were true, it may very well invoke the Sherman Anti-Trust Act; however, there is no deception, no fraud, and no attempt to restrict/divide the market = no crime.

 

 

Artificially holding a hammer price down through the use of ring bidding is every bit as illegal as artifically inflating the hammer price through the use of a shill. One must ethically endose both sides or neither.

 

 

There is no way that you could compare the ethical ramifications attached to the situation outlined in the original poster's comment with shill bidding. In the latter, the seller is fraudulently increasing the bid on his own auction to levels higher than the market will generally sustain (i.e. the market price/hammer price would be lower absent the shill bid). Also note that with shill biding, there is an intent to defraud the potential bidders into believing that the market is requiring a higher price than it actually does. This is fraud, and yes this is illegal. Now compare this to the instant situation where there is no misrepresentation of fact or market condition, and there is no attempt to defraud. With this situation, a bidder is refusing to bid when he knows that another collector is going to put a very high bid on another piece, perhaps a price that will not be replicated if the two were to enter a "bidding war." This is common sense. I cannot fathom how you could possibly equate the two. It is no one else's concern about whether or not I choose to bid in an auction - the government cannot force a bid. You are comparing apples and oranges.

 

Thank you