Oh there were most definitely some ghost bids at this auction. But this comes as no surprise. If they're a crap auctioneer (and these guys were) then they need that.
A good auctioneer will do exactly what Isemmens said, make you pay 300% the value of the item without any shenanigans.
The really hard one to judge would be a real estate auction Gordon. I'm surprised the ACCC or fair trading doesn't legislate and actively police that kind of activity.
Even having hard evidence against real estate agents of illegal practices in the past, fair trading wasn't interested.

What I wasn't sure about this auction was if there were fake bidders. Like you say, it is hard to pick them out at once off auctions.
I certainly wouldn't have noticed them while I was bidding, I would be concentrating on the intervals between bids and the current price.
If the bid intervals changed, I might be suspicious of who was bidding and stop and make the everybody think I'd reached the limit.

I changed tactics for one of the items I was bidding on because I was aware of another collector interested in and I'd heard him talking about it.
If there had been a fake bidder in the crowd for that item I would have noticed it. He was the only person bidding on it and thought he had it for a good price until I jumped in last second.
He quickly reacted to the bid and I stalled to make him revalue the item on the fly. If there had been a fake bidder, that would have been the time to nudge.

My local auctions however I have noticed that the auctioneers don't fake or ghost bid, but the sellers certainly do and I've caught them doing it.
I bid on an item and it was a dirt cheap price. A woman bid on it and I counter bidded. still a reasonable price, she bid it up and I was suspicious. I let her have it.
A few minutes later she cam up to me and gave me a bullshit story about how he daughter didn't like it and she'd let me have it for the price she bought it for.
"Nar sorry, I actually think my last bid was too much, I'll buy it for my starting bid price if you want to sell it."

Nope ... heheeh... a month later, I bought it for even less.

The punishment for failure is the 12.5% buyers and sellers premium. (25%) of the final bid price.
I watch for strange bidders bidding on any two different items on the same table.
I've let items go because I have suspected the bidder was sus. About 30% of the time the same item is back next month.