A simple shill bidding agent

Abstract

Shill bidding is where fake bids are introduced into an auction to drive up the final price for the seller, thereby defrauding legitimate bidders. Although shill bidding is strictly forbidden in online auctions such as eBay, it is still a major problem. This paper presents a software bidding agent that follows a shill bidding strategy. The malicious bidding agent was constructed to aid in developing shill detection techniques. The agent incrementally increases an auction's price, forcing legitimate bidders to submit higher bids in order to win the item. The agent ceases bidding when the desired profit from shilling has been attained, or in the case that it is too risky to continue bidding without winning the auction. The agent's ability to inflate the price has been tested in a simulated marketplace and experimental results are presented. This is the first documented bidding agent that perpetrates auction fraud. We do not condone the use of the agent outside the scope of this research.