Preventing Collusion At Auctions In Arizona

Are you a regular visitor to auctions in Arizona? Are you an owner or operator of auctions? Then this article is for you. This article will discuss collusion at auctions as well as provide some tips on how to prevent bidder collusion, seller collusion and even auctioneer collusion.

Increasing the number of bidders helps prevent bidder collusion at auctions in Arizona because it makes it less likely that everyone bidding on an item will be included in the bidding ring. It also decreases the likelihood the seller will engage in collusion to try to raise already satisfactory bid levels.

Reserve auctions in Arizona discourage collusion because it is unlikely that collusion will result in sufficient profits to offset the risk involved in colluding. In a situation where there is a strong bidder ring or a heavy weight bidder holding down bids, one of the best ways to prevent further collusion is the sealed bid auction. A secret sealed bid makes it dramatically more difficult for a heavy weight bidder to scare off other bidders or for a bid ring to detect a defector. However auctioneers hate sealed bid auctions in Arizona because it takes them out of the loop and costs them business.

Auctioneers don't like reserve auctions or sealed bid auctions in Arizona and yet the auction industry seems to be doing little to prevent trends in this direction. The potential for collusion to result in a loss of business is the reason why everyone in the auction industry should take the problem of collusion very seriously. Currently the auction industry seems to have a tolerant attitude towards collusion similar to that of used car salespeople.

Sellers who are not convinced they will receive fair prices will not sell at auctions in Arizona. Buyers will not attend auctions if they believe they are being forced to overpay. Most importantly, collusion of any type at auction is against the law.

At one auction I conducted several years ago, I actually accused two bidders of collusion, because they had participated in the practice for several years and it was well known to auctioneers in the area. My mistake was to accuse them of the practice while I was selling on the auction block. I embarrassed them and myself at the same time. What I have found to be a much better practice is too simply involve my ring people in separating the suspected offenders. The ring people actually get in the personal space between the offenders and keep them from communicating. This creates so much confusion between the offenders that they are forced to bid on their own behalf in fear that neither party will be the winning bidder.

I am sure that you have developed some of your own tactics to prevent collusion that are far superior to those used at most auction houses. However, I would suggest a review of your anti-collusion tactics. As an industry we must all work to stamp out collusion of any kind so we can offer a valuable experience to both our sellers and buyers.