Management Information System (MIS) Practice Exam

Doug uses two different accounts to place bids in auctions. This practice is known as ________.

1. Payment fraud

2. Shill bidding

3. Nonshipment

4. Bid skimming

The correct answer is: Shill bidding

The practice Doug is engaging in is referred to as shill bidding. Shill bidding occurs when someone places bids on an item with the intention of artificially inflating the price or creating a false sense of competition. This can be done by the seller or someone associated with them, and its purpose is often to mislead other bidders into believing that there is more interest in the item than actually exists, thereby encouraging them to place higher bids. In this case, using two different accounts to place bids allows Doug to portray himself as multiple interested parties, effectively manipulating the auction dynamics to his advantage. Shill bidding is considered unethical and is often prohibited by auction platforms due to its deceptive nature. The other choices do not accurately describe this practice. Payment fraud refers to deceptive practices involving financial transactions, nonshipment relates to goods being purchased but not shipped to the buyer, and bid skimming would imply a method of collecting fees or profits from bids without participation in the auction process. These terms do not align with Doug's actions of bidding on his own items.