Auctions are considered the most transparent art trade channel out there — sales are clear, prices are made public, anybody can participate… However, there are some shady practices that cast a shadow over the seemingly straightforward and fair auction process. In this article, we’ll share some light on these controversial practices that impact the sales and the prices of the auction lots.
Chandelier Bidding
Chandelier bidding (or phantom bidding) happens when auctioneers pretend that they saw somebody in the back place a bid, even though nobody bided on the artwork.
There are several reasons why auctioneers use chandelier bids. First, they are a great way to start an auction, as many people are reluctant to be the first ones to place a bid. Another reason is to hide the reserve (the minimal price that the seller demands for a lot). The bidding has to start somewhere. If the bidding was to start from the reserve price, then the buyers would know the exact amount that the seller is willing to settle for, which would discourage them from bidding higher.
