Abstract:In a multi-unit online English auction, the honest bidders can adopt the counteracting bidding strategies to reduce the seller's incentive to shill. However, even we consider the honest bidders' strategic response to shill bidding, the shill bidding is still profitable for the seller. The more effective measures to deter shill bidding may include attracting more potential bidders and limiting the number of items for sale in one auction. We also consider seller's optimal strategic response to the counteracting bidding strategies, and solve seller's optimal shill bidding. The result shows that whether the optimal shill bid-ding is unique or multiple, the optimal strategy for the seller is to adopt a lower shill bid at the beginning, and then dynamically adjust the shill bid to the optimal level after observing the previous bidding information.