What must be disclosed when the seller retains the right to bid during an auction?

When a seller retains the right to bid during an auction, full disclosure of this retained liberty to bid is crucial to ensure transparency and maintain trust among all participants. This requirement is in place to prevent any potential manipulation of the auction process, where a seller might unfairly influence the bidding outcome by participating in their own auction. By clearly disclosing that the seller has the right to bid, all bidders are made aware of the seller's potential involvement, allowing them to make informed decisions as they place their bids.

This practice aligns with ethical standards in the auction industry, promoting honesty and fairness. Without such disclosure, bidders might assume they are competing against other bidders when, in fact, the seller could be strategically bidding to drive up prices or protect their interests, which could lead to dissatisfaction and distrust with the auction process.