Alternative fees presented as shill bidding preventative
21 February 2007There’s been a fair bit of turbulence lately about the prevalence of a practice called shill bidding on many of the auction sites. While many have presumed that the practice is never going away, some researchers at ECS have come up with a new fee structure that could greatly reduce the occurrence of shill bidding.
The alternative fee structure proposed by the ECS researchers takes a percentage only of the difference between the set minimum price and the final selling price. This fee effectively rewards the setting of a minimum price and has been shown to reduce the incentive for sellers to shill bid, as well as providing higher benefits to the buyers.
I don’t think that eBay in particular would accept the proposed structure as their only fees, but I could see it being used in conjunction with a several of the current fees such as the starting price(insertion) fee, reserve fee, buy it now fee, and possibly a smaller final value fee. The issue with the fee structure as proposed is that it works to remove the huge threat of shill bidding, but not the problem of fee avoidance.
If the fee is a percentage of the difference from your starting price and the final value, it would make sense to cut that difference as much as possible and as a result avoid fees. So, using that solely would certainly not work. Especially if you look at it from the point of view of the auction service that many have taken to calling feeBay.
[tags]fees,shill bidding,ebay,auction,ecs[/tags]
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