This paper investigates shill bidding in online auctions. We apply a five stage algorithm for identifying cases of shill bidding to a sample of eBay transactions in order to determine how often shill bidding happens, whether professional sellers or hobby sellers are more likely to engage in this practice and what strategies are used. We find that shill bidding happens often (18% - 28% of the time) across a variety of products. In the product categories examined, professional sellers engage in this practice more often than hobby sellers. Both competitive bidding and bid encouragement strategies are commonly but unequally used across product categories and by professional versus hobby sellers.
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