It’s a strange combination of eBay, woot, and slot machine.
I had never been to the site but after watching for a few minutes, I totally agree with the slot-machine comparison. ::shivers ::
I think your chimpanzee article may have been shown to be improperly interpreted. It sounds very similar in the least.
Wow. They also selling an item called 50 FreeBids Voucher. You bid to win an action so that you can bid more. I guess the idea is that you could make bidding less expensive. This is utterly ridiculous…
This is one of the most common Poker misconception - pot commitment. Basically, it describes people who put money in a pot, then get bad cards, but continue to call other peoples bets, because they feel they are committed to the pot, because they put so much money in it.
The simple truth most professional Poker players will tell you - there is no such thing as pot commitment. The same holds true here: even if you bid 100 times on something, and wasted 75 bucks in bids to get to, say, $200, you are still not off any worse if you just ABANDON that auction, and bid $210 once on a different auction for the same item instead. It only feels like you are bound to this auction.
Remember that iPod Touch I referred to in the post? Here’s the actual item:
www.swoopo.com/auction/item/128263.html
The winner, Xopex, paid more than the price of the item with 98 bids.
Worth up to: $229.00
Placed bids (98): $73.50
Final price: $187.65
The item page says that’s a savings of 0%! Really it’s a savings of -14% but who’s counting…
Jeff,
I thought eBay did automatically extend auctions?
Anyway… on eBay… you just bid once. Bid the highest amount that you would pay for the item. Your bids are automatically upped to your max bid.
So, bid as much as you are willing to pay, and .01 cent more you wouldn’t care. Then deal with it if you loose buy .01. If you were willing to pay more, why didn’t you make that your original bid?
BOb
That is fiendishly brilliant, I wish I was not cursed with a conscience.
Sunk cost fallacy strikes again!
They can’t lose! Simply by ensuring the house places the last bet. As long as some schmuck places a bid each auction generates revenue.
Brilliant business model, but does not seem illegal. Actually, they website won’t let you register if you live in certain states, so it looks like the laws are based on the state level.
I see it like a carnival game. In a carnival game, you pay $1 and get three balls. With these three balls you have to knock down 3 pins off a pedestal. If you succeed, you win an item that is worth far more than $1. If you do not succeed, you just played the game which cost you $1 and you got nothing to show for it - you can always try again for $1.
With swoopo, it seems like the same thing. You pay $0.75 for a chance to play a game. The game involves skillfully placing a bid at a time when others are least likely - where the cost has gotten high enough where people are not likely to bid, but not so high where you are not saving enough money to offset your risk of losing $0.75. If you succeed, you get to buy some nice hardware at a bargain. If you don’t you can always try again for another $0.75.
This is all assuming they are running an honest operation according to their stated rules.
Caveat emptor indeed.
I think this is absolutely crazy.I have never heard of this web site what everyone seems to be losing money.I think if I was the people bidding I would just stop nowbecause it doesn’t seem like you will ever get a good deal.
There’s something else at work here, though, and it’s almost an exploit of human nature itself.
The whole ad industry is based on this principle. Nothing new here. People whining about swoopo are probably jealous. I mean here they are, a web start-up that actually makes money.
Uh, hey. People.
It doesn’t matter if this is the worst, most evil thing in history. This is the United States. People have a right to be as dumb as they want, and other people have a right to take advantage of those dumb people, so long as they have given consent.
It’s a good system to make sure that dumb people don’t get too much money or power. So good job, Swoopo, for keeping us save from the idiots who would fall for your crap.
wow - fantastic analysis! I hit the site a couple times through ads, and felt like something was a little off - that ‘entertainment shopping’ / lottery / gambling angle is dead on, that’s exactly what’s going on.
It’s not quite as clever as a system that encourages users to spend time creating online content against which advertising can be sold, without the obligation to pay for that time at a fair market rate.
Anyone want to bet that they don’t display the remaining amount of bids you have?
As noted before, there was a very similar auction site in Turkey, called altivi.com.
I think the way altivi worked was even crazier than Swoopo. Every item had a ceiling price, and a bid price. You could bid any price below the ceiling price, and each bid cost you the bid price for that item (usually between 1 TRY and 20 TRY). In the end, the highest unmatched (meaning only the winner had bid that price) bid won.
It later turned out that the founders of the site provided backdoor access to their friends so that they could see the highest unmatched bid for any item. There were rumors of people winning two BMWs in a row.
Needless to say, the site was shut down (though it still says it’s closed for technical maintenance), and the founders have been arrested.
I assume a large chunk of bidders would wait till it is just 1 secs left and click bid. This means there could be a number of people clicking bid right at the time it it hits 1 sec. This means from just 1 sec left I should jump up to more than a 15 secs multiple. Yet while watching it I see many times where it jumped only to 15 secs and dropped to around 1 sec, then back to 15. Something ain’t right there!
I’ve never understood the Puritan attitude to gambling in the US.
Unless the system is rigged in a hidden way, there’s nothing wrong with it, and to interfere (other than to verify against hidden levers) would be to curtail personal and economic liberty.