Shill

Last updated

A shill, also called a plant or a stooge, is a person who publicly helps or gives credibility to a person or organization without disclosing that they have a close relationship with said person or organization. Shills can carry out their operations in the areas of media, journalism, marketing, politics, sports, confidence games, cryptocurrency, or other business areas. A shill may also act to discredit opponents or critics of the person or organization in which they have a vested interest. [1] [2]

Contents

In most uses, shill refers to someone who purposely gives onlookers, participants or "marks" the impression of an enthusiastic customer independent of the seller, marketer or con artist, for whom they are secretly working. The person or group in league with the shill relies on crowd psychology to encourage other onlookers or audience members to do business with the seller or accept the ideas they are promoting. Shills may be employed by salespeople and professional marketing campaigns. Plant and stooge more commonly refer to a person who is secretly in league with another person or outside organization while pretending to be neutral or part of the organization in which they are planted, such as a magician's audience, a political party, or an intelligence organization (see double agent).[ citation needed ]

Shilling is illegal in many circumstances and under many jurisdictions [3] because of the potential for fraud and damage. However, if a shill does not place uninformed parties at a risk of loss, the shill's actions may be legal. For example, a person planted in an audience to laugh and applaud when desired (see claque), or to participate in on-stage activities as a "random member of the audience", is a legal type of shill. [4]

Etymology

The origin of the term "shill" is uncertain; it may be an abbreviation of "shillaber". The word originally denoted a carnival worker who pretended to be a member of the audience in an attempt to elicit interest in an attraction. Some sources trace the usage back to 1914, [5] [6] or as far back as 1911. [7] American humorist Benjamin Penhallow Shillaber (1814–1890), who often wrote under the guise of his fictional character Mrs. Ruth Partington, the American version of Mrs. Malaprop, is a possible source.

Internet

In online discussion media, shills make posts expressing opinions that further interests of an organization in which they have a vested interest, such as a commercial vendor or special interest group, while posing as unrelated innocent parties. For example, an employee of a company that produces a specific product might praise the product anonymously in a discussion forum or group in order to generate interest in that product, service, or group. Web sites can also be set up for the same purpose. In addition, some shills use sock puppetry, where one person poses as multiple users.[ citation needed ]

In some jurisdictions and circumstances, this type of activity is illegal. The plastic surgery company Lifestyle Lift ordered their employees to post fake positive reviews on websites. As a result, they were sued, and ordered to pay $300,000 in damages by the New York Attorney General's office. [8]

Reputable organizations may prohibit their employees and other interested parties (contractors, agents, etc.) from participating in public forums or discussion groups in which a conflict of interest might arise, or will at least insist that their employees and agents refrain from participating in any way that might create a conflict of interest.[ citation needed ]

Gambling

Both the illegal and legal gambling industries often use shills to make winning at games appear more likely than it actually is. For example, illegal three-card monte and shell-game peddlers are notorious employers of shills. These shills also often aid in cheating, disrupting the game if the mark is likely to win. In a legal casino, however, a shill is sometimes a gambler who plays using the casino's money in order to keep games (especially poker) going when there are not enough players. The title of one of Erle Stanley Gardner's mystery novels, Shills Can't Cash Chips, is derived from this type of shill. This is different from "proposition players" who are paid a salary by the casino for the same purpose, but bet with their own money.[ citation needed ]

Marketing

In marketing, shills are often employed to assume the air of satisfied customers and give testimonials to the merits of a given product. This type of shilling is illegal in some jurisdictions, but almost impossible to detect. It may be considered a form of unjust enrichment or unfair competition, as in California's Business & Professions Code § 17200, which prohibits any "unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising". [9]

Auctions

People who drive prices in favor of the seller or auctioneer with fake bids in an auction are called shills or potted plants and seek to provoke a bidding war among other participants. [10] [11] [12] Often they are told by the seller precisely how high to bid, as the seller does not lose money if the item does not sell, paying only the auction fees. Shilling has a substantially higher rate of occurrence in online auctions, where any user with multiple accounts can bid on their own items. One detailed example of this has been documented in online auto auctions. [10] The online auction site eBay forbids shilling; its rules do not allow friends or employees of a person selling an item to bid on the item, [13] even though eBay has no means to detect if a bidder is related to a seller or is in fact the seller. [14]

In his book Fake: Forgery, Lies, & eBay, Kenneth Walton describes how he and his accomplices placed shill bids on hundreds of eBay auctions over the course of a year. Walton and his associates were charged and convicted of fraud by federal authorities for their eBay shill bidding. [15]

With the proliferation of live online auctions in recent years, shill bidding has become commonplace.[ citation needed ] Some websites allow shill bidding by participating auctioneers. These auctioneers are able to see bids placed in real time and can then place counter bids to increase the amount. One Proxibid auctioneers' website states, "At the request of the auction company, this auction permits bids to be placed by the seller or on the seller's behalf, even if such bids are placed solely for the purpose of increasing the bid." [16]

See also

Related Research Articles

<span class="mw-page-title-main">Auction</span> Process of offering goods or services up for bids

An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition exist and are described in the section about different types. The branch of economic theory dealing with auction types and participants' behavior in auctions is called auction theory.

eBay American multinational e-commerce corporation

eBay Inc. is an American multinational e-commerce company based in San Jose, California, that brokers customer to customer and retail sales through online marketplaces in 190 markets worldwide. Sales occur either via online auctions or "buy it now" instant sales, and the company charges commissions to sellers upon sales. eBay was founded by Pierre Omidyar in September 1995. It has 134 million yearly active buyers worldwide and handled $74 billion in transactions in 2022, 49% of which was in the United States. In 2022, the company had a take rate of 13.25%.

<span class="mw-page-title-main">Dutch auction</span> Type of auction which begins with a high asking price, and lowers it.

A Dutch auction is one of several similar types of auctions for buying or selling goods. Most commonly, it means an auction in which the auctioneer begins with a high asking price in the case of selling, and lowers it until some participant accepts the price, or it reaches a predetermined reserve price. This type of price auction is most commonly used for goods that are required to be sold quickly such as flowers, fresh produce, or tobacco. A Dutch auction has also been called a clock auction or open-outcry descending-price auction. This type of auction shows the advantage of speed since a sale never requires more than one bid. It is strategically similar to a first-price sealed-bid auction.

<span class="mw-page-title-main">Online auction</span> Auction held over the internet

An online auction is an auction held over the internet and accessed by internet connected devices. Similar to in-person auctions, online auctions come in a variety of types, with different bidding and selling rules.

<span class="mw-page-title-main">Vickrey auction</span> Auction priced by second-highest sealed bid

A Vickrey auction or sealed-bid second-price auction (SBSPA) is a type of sealed-bid auction. Bidders submit written bids without knowing the bid of the other people in the auction. The highest bidder wins but the price paid is the second-highest bid. This type of auction is strategically similar to an English auction and gives bidders an incentive to bid their true value. The auction was first described academically by Columbia University professor William Vickrey in 1961 though it had been used by stamp collectors since 1893. In 1797 Johann Wolfgang von Goethe sold a manuscript using a sealed-bid, second-price auction.

<span class="mw-page-title-main">English auction</span> Type of dynamic auction

An English auction is an open-outcry ascending dynamic auction. It proceeds as follows.

<span class="mw-page-title-main">Bid rigging</span> Form of procurement fraud

Bid rigging is a fraudulent scheme in a procurement action which enables companies to submit non-competitive bids. It can be performed by corrupt officials, by firms in an orchestrated act of collusion, or by officials and firms acting together. This form of collusion is illegal in most countries. It is a form of price fixing and market allocation, often practiced where contracts are determined by a call for bids, for example in the case of government construction contracts. The typical objective of bid rigging is to enable the "winning" party to obtain contracts at uncompetitive prices. The other parties are compensated in various ways, for example, by cash payments, or by being designated to be the "winning" bidder on other contracts, or by an arrangement where some parts of the successful bidder's contract will be subcontracted to them. In this way, they "share the spoils" among themselves. Bid rigging almost always results in economic harm to the agency which is seeking the bids, and to the public, who ultimately bear the costs as taxpayers or consumers.

<span class="mw-page-title-main">Japanese auction</span>

A Japanese auction is a dynamic auction format. It proceeds in the following way.

A bidding fee auction, also called a penny auction, is a type of all-pay auction in which all participants must pay a non-refundable fee to place each small incremental bid. The auction is extended each time a new bid is placed, typically by 10 to 20 seconds. Once time expires without a new bid being placed, the last bidder wins the auction and pays the amount of that bid. The auctioneer profits from both the fees charged to place bids and the payment for the winning bid; these combined revenues frequently total more than the value of the item being sold. Empirical evidence suggests that revenues from these auctions exceeds theoretical predictions for rational agents. This has been credited to the sunk cost fallacy. Such auctions are typically held over the Internet, rather than in person.

<span class="mw-page-title-main">Auction sniping</span> Bidding at the last moment as an auction strategy

Auction sniping is the practice, in a timed online auction, of placing a bid likely to exceed the current highest bid as late as possible—usually seconds before the end of the auction—giving other bidders no time to outbid the sniper. This can be done either manually or by software on the bidder's computer, or by an online sniping service.

<span class="mw-page-title-main">Auction theory</span> Branch of applied economics regarding the behavior of bidders in auctions

Auction theory is an applied branch of economics which deals with how bidders act in auction markets and researches how the features of auction markets incentivise predictable outcomes. Auction theory is a tool used to inform the design of real-world auctions. Sellers use auction theory to raise higher revenues while allowing buyers to procure at a lower cost. The conference of the price between the buyer and seller is an economic equilibrium. Auction theorists design rules for auctions to address issues which can lead to market failure. The design of these rulesets encourages optimal bidding strategies among a variety of informational settings. The 2020 Nobel Prize for Economics was awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.”

<span class="mw-page-title-main">Multiunit auction</span>

A multiunit auction is an auction in which several homogeneous items are sold. The units can be sold each at the same price or at different prices.

<span class="mw-page-title-main">Bidding</span> Method of competitive price determination used in auctions, stock exchanges, etc.

Bidding is an offer to set a price tag by an individual or business for a product or service or a demand that something be done. Bidding is used to determine the cost or value of something.

Auction chant is a rhythmic repetition of numbers and "filler words" spoken by auctioneers when taking bids at an auction. Auction chanting is a method of conducting live auctions frequently found in North America where it is practiced in English, Spanish, French and other languages. It is much less common outside North America, and the most notable exceptions within North America are auction houses with significant ties elsewhere in the world such as art brokerages. The chant consists of at least the current price, the asking price to outbid and words to keep the audience engaged. Auctioneers typically develop their own style, and competitions are held to judge them. Outside of auctions, the chant has been the subject of music and used in commercials and film.

<span class="mw-page-title-main">Mock auction</span>

A mock auction is a scam usually operated in a street market, disposal sale or similar environment, where cheap and low quality goods are sold at high prices by a team of confidence tricksters.

eBay has faced controversy, including failure to combat fraud committed by buyers and sellers, concerns over its rating systems, and concerns over sales of controversial or illegal items.

Customer to customer markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

<i>Auction Kings</i> American TV series or program

Auction Kings is a reality television series produced by Authentic Entertainment for the Discovery Channel. The series premiered on October 26, 2010, taking place in the Atlanta auction house Gallery 63 in Sandy Springs, Georgia, located on Roswell Road immediately north of the Atlanta city limit. The gallery has since relocated. The series capitalized on the success of the History Channel's widely successful Pawn Stars. The auction house employees often rely on experts to appraise items of which historical background is provided to the viewer. Sellers offer comments regarding the merchandise at hand both before and after the auction. At the second commercial break, a multiple-choice question about the auction house or the items is presented. The show ran its final episode on May 16, 2013.

<span class="mw-page-title-main">Reverse auction</span> Auction with one buyer and many potential sellers

A reverse auction is a type of auction in which the traditional roles of buyer and seller are reversed. Thus, there is one buyer and many potential sellers. In an ordinary auction also known as a forward auction, buyers compete to obtain goods or services by offering increasingly higher prices. In contrast, in a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.

PropertyRoom.com is a live online auction website that sells confiscated police goods and approved third party merchant merchandise to the highest winning bidder. PropertyRoom.com is the largest online police auction website in the United States.

References

  1. ↑ "Shill Definition & Meaning | Britannica Dictionary". www.britannica.com. Retrieved 2023-06-23.
  2. ↑ Curzan, Anne; Emmons, Kimberly (February 13, 2012). Studies in the History of the English Language II: Unfolding Conversations (2nd ed.). Germany: De Gruyter. p. 90. ISBN   9783110897661.
  3. ↑ FTC v. Greeting Cards of America, Inc.(S.D. Fla.2004), Text .
  4. ↑ Underwood, John (10 January 2013). Expert Character Assassination. Lulu.com. ISBN   978-1-300-62249-9.
  5. ↑ "shill". Definition of SHILL. The Free Merriam-Webster Dictionary. Merriam-Webster, Inc. 4 September 2023.
  6. ↑ Note: Shillaber as a surname was known in the US during the 19th century.
  7. ↑ "etymology – Origin of the word "shill" ("shillaber")". English Language & Usage Stack Exchange.
  8. ↑ "Attorney General Cuomo Secures Settlement With Plastic Surgery Franchise That Flooded Internet With False Positive Reviews" (Press release). Office of the New York State Attorney General. July 14, 2009. Retrieved 2016-01-13.
  9. ↑ Balough Dancey, Cheryl (November 2012). "A survey of False Advertising In Cyberspace". The Business Lawyer. 68 (1): 297–304. JSTOR   23527095.
  10. 1 2 Grether, David; Porter, David; Shum, Matthew (2015). "Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment". American Economic Journal: Microeconomics. 7 (3): 85–103. doi:10.1257/mic.20120085. ISSN   1945-7669. S2CID   19667170.
  11. ↑ Talbott, Marti (2014). Marblestone Mansion, Book 7. MT Creations Corporation. Retrieved 24 October 2020.
  12. ↑ Timothy, Jason. "mpo slot" . Retrieved 4 July 2023.
  13. ↑ Whitworth, Dan (July 5, 2010). "Man fined over fake eBay auctions". BBC.
  14. ↑ "Shill Bidding Policy". Ebay. Retrieved 2018-02-14.
  15. ↑ Glaister, Dan (August 1, 2006). "A brush with the law". The Guardian.
  16. ↑ "General Terms And Conditions". Prime Star Auctions. Archived from the original on 2014-08-10. Retrieved 2014-07-30.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.