Chandelier Bid

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DEFINITION of 'Chandelier Bid'

A bid that is announced by an auctioneer during an auction that has not been signaled by a participant, but has rather been fabricated by the auctioneer in order to create the appearance of greater demand for the item at auction.

INVESTOPEDIA EXPLAINS 'Chandelier Bid'

Chandelier bids are so named because the auctioneer announcing the bids may point to the ceiling or other areas of the room rather than at actual bidders. This gives the illusion that bids are being made.

Chandelier bids are not illegal, but can be frowned upon by bidders who don’t like the idea of competing against imaginary competitors. They are most likely to be used when the seller has placed a reserve price on the item, with the auctioneer having leeway at increasing the “bid” until the reserve price is reached.

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