So there may be a problem with “wide-spread” shill bidding on eBay. The problem may need the ministrations of academic research to correct. Or reports of the problem may be seriously overblown.
In any case, those participating in auctions (whether as bidders or as consignors or as auctioneers) tend to seek — as do most folks engaged in competitive endeavors — an advantage. The advantage may be relatively benign, viz., booksellers in any given auction room tend to line the back wall. Or the competitive advantage may on occasion involve some degree of perfidy (viz. the practice of employing shills).
I have just a couple of quick thoughts off the top of my head on this, in part because the Bibliophagist does not endorse unethical or illegal behavior in the machinations of the book trade and yet realizes that such behavior is inevitable. (Though you can take reasonable steps to mitigate such problems.) But any discussion of this sort also begs the question as to what, exactly, is the right price for a book.
Broadly speaking, the one who is buying a book wants to pay nearly nothing; the one who is selling the book wants to realize what he or she will characterize as a “fair price” for the item. Without wishing to be impious (or to suggest which role the bookseller might play), certain aspects of the trade at times begin resemble Genesis 32:24.
In any event, for a fairly concise look at the general evolution of the book auction, see Nicolas Barker’s 1995 essay for ABPC; for a scholarly study of the workings of the early 20th century auction ring, track down a copy of Arthur Freeman and Janet Ing Freeman’s Anatomy of an Auction (which appears to have gone out of print). And for one alternative model of pricing, see the proposal for the “drunkard’s auction” at Notional Slurry.
A followup notion—the ratchet auction, or perhaps “ratchet sale”, or maybe less liltingly but technically correct “Dutch auction with stochastic resetting”—is actually a much more economically sensible proposal (if I do say so myself).