Pennsylvania Auctioneer Practice Exam

What are 'shill bidding' practices considered under Pennsylvania law?

1. Legal with restrictions

2. Illegal and unethical

3. Encouraged for higher prices

4. Permitted with disclosure

The correct answer is: Illegal and unethical

Shill bidding refers to the practice where individuals place bids on an item with the intent to artificially inflate the price without any genuine interest in purchasing the item. Under Pennsylvania law, this practice is deemed illegal and unethical because it undermines the integrity of the auction process. It misleads genuine bidders by creating a false sense of competition, which can lead to inflated prices that do not reflect the true market value of the items being auctioned. The prohibition against shill bidding is designed to protect consumers and maintain a fair bidding environment. By making it illegal, Pennsylvania law aims to ensure that auctions are conducted transparently and buyers can engage in the bidding process with confidence, knowing that the bids are legitimate and represent authentic interest in the items. This emphasis on ethical practices is essential for preserving trust in both auctions and the broader marketplace.