Getting into the mind of an "in-auction" fraud perpetrator

Online auctions are a popular means for exchanging items over the Internet. However, participants can behave in an undesirable manner during an auction in an attempt to gain an unfair advantage at the expense of rivals. Such conduct is a problem as it results in market failure, thereby inhibiting the usefulness of online auctions as an exchange medium. This paper presents a taxonomy of the fraudulent behaviour that can occur while an online auction is in-progress. We examine the perpetrator’s mindset for the following dubious practices: shill bidding, bid sniping, bid shielding, and bid siphoning. We propose the characteristics of such behaviour, the strategies employed, identify the expected pay-off for the perpetrator, and present a novel “Victim Sphere” that outlines who is negatively affected by bad behaviour. We also briefly outline the current state of prevention and detection mechanisms—identifying gaps and open questions where applicable. We contrast the types of undesirable and fraudulent behaviour, describe how they are interrelated, and discuss the challenges researchers face when devising and testing fraud detection/prevention techniques for in-auction fraud. This paper serves as a platform to raise research interest in tackling the remaining challenges for combating in-auction fraud.