3 ms·

What's the argument that this is gambling? Or rather, that this is gambling while eBay is not? I understand on a rational level that this is less fair to bidde

by rtpg 10y ago

What's the argument that this is gambling? Or rather, that this is gambling while eBay is not? I understand on a rational level that this is less fair to bidders and a bad model if you want to just buy things, but I don't see where this is a game of chance instead of a consequence of who is participating.

feider 10y ago
I would argue that it depends on how predictable the output is for a given system that determines if it is a gamble or not. A simple rule system with numerous agents can produce output that is really hard to predict.
igf 10y ago
> What's the argument that this is gambling? I suppose because you pay a small amount of money and you may or may not get something valuable out, which makes it effectively gambling from the bidder's point of view. > but I don't see where this is a game of chance instead of a consequence of who is participating From the point of view of an individual bidder, "who else is participating" is a matter of chance.
martin-adams 10y ago
If eBay is gambling, then buying a house and upping my offer against someone else should also be considered gambling.
notahacker 10y ago
eBay involves naming a price for an item, which you pay only if your price is accepted and you receive that item. Penny auctions involve naming a price, purchasing a bet nobody else will name a valid price after you, and you receive the item only if your bet wins, in which case your "prize" is actually an option to buy the item at your named price. What's ridiculous beyond belief is that the "skill level" involved is sufficient to make it not gambling when poker is a regulated game...
edu 10y ago
Here you pay for each bid, so you pay whether you win or not. AFAIK in eBay you only pay if you win the auction.
caf 10y ago
Here you commit funds, and either get nothing back or something depending on a hidden variable that you can't control.
ryporter 10y ago
I agree. Others here are making arguments as to why they think this is akin to gambling, but there is a specific legal definition of gambling (at least here in the U.S.) -- "A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome." [1] This is not a contest of chance, and there is no future contingent event. Other participants future actions within this event do not count as a "future contingent event." [1] http://definitions.uslegal.com/g/gambling/ http://definitions.uslegal.com/g/gambling/
- shawabawa3 10y ago
  > This is not a contest of chance It's absolutely a contest of chance. There's no skill at all, you're betting on the probability nobody else will bid in the next 15 seconds. If this is considered a game of skill I have no idea how you could defend sportsbetting or poker being gambling
  - bigtunacan 10y ago
    I agree there is no skill involved, but it is not a contest of chance either. Assuming the house is not cheating and using shill accounts (which does happen, but IS illegal) then the last person to continue bidding wins. So in that regard it is by definition not chance. You just continue to bid until no one else bids and then you win.
  - ryporter 10y ago
    Not knowing what your opponent will do does not make it a game of chance. For the purpose of defining gambling, the component of chance must be exogenous to the participants.
    - dragonwriter 10y ago
      > For the purpose of defining gambling, the component of chance must be exogenous to the participants. There are many different legal definitions of gambling (even in the US -- each state that regulates gambling has at least on definition of its own, as well as the feds, and the same jurisdiction may have different definitions in different laws) but the one you posted upthread requires only that the future contingent event on which one participant is at risk be out of control of that participant, not that it must be "exogenous to the participants".
kharms 10y ago
As others mentioned, placing a bid on eBay doesn't cost you anything. More importantly, these penny auctions lack is transparency. The argument is that they're not gambling because it's a game influenced by skill, but for that to be true you would need transparency into who many bids have been made, by which people, with what timing. This doesn't appear to be possible without running an aggregation script.
0xcde4c3db 10y ago
Not sure where to find a reference, but ISTR it's been shown that the bidding sequence in penny auctions is functionally indistinguishable from a random process (provided that bidders aren't colluding to throw the auction to a predetermined winner), in much the same way that die rolls or coin flips are functionally random even though they're determined by a person applying mechanical forces. And unlike conventional auctions, all bidders end up paying. They don't pay the final "auction price", but they do pay a fee for placed bids. So the practical upshot is that this functions like a raffle or lottery, with the "auction" elements basically being window dressing.

by rtpg 10y ago

feider 10y ago

I would argue that it depends on how predictable the output is for a given system that determines if it is a gamble or not. A simple rule system with numerous agents can produce output that is really hard to predict.

igf 10y ago

> What's the argument that this is gambling? I suppose because you pay a small amount of money and you may or may not get something valuable out, which makes it effectively gambling from the bidder's point of view. > but I don't see where this is a game of chance instead of a consequence of who is participating From the point of view of an individual bidder, "who else is participating" is a matter of chance.

martin-adams 10y ago

If eBay is gambling, then buying a house and upping my offer against someone else should also be considered gambling.

notahacker 10y ago

eBay involves naming a price for an item, which you pay only if your price is accepted and you receive that item. Penny auctions involve naming a price, purchasing a bet nobody else will name a valid price after you, and you receive the item only if your bet wins, in which case your "prize" is actually an option to buy the item at your named price. What's ridiculous beyond belief is that the "skill level" involved is sufficient to make it not gambling when poker is a regulated game...

edu 10y ago

Here you pay for each bid, so you pay whether you win or not. AFAIK in eBay you only pay if you win the auction.

caf 10y ago

Here you commit funds, and either get nothing back or something depending on a hidden variable that you can't control.

ryporter 10y ago

I agree. Others here are making arguments as to why they think this is akin to gambling, but there is a specific legal definition of gambling (at least here in the U.S.) -- "A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome." [1] This is not a contest of chance, and there is no future contingent event. Other participants future actions within this event do not count as a "future contingent event." [1] http://definitions.uslegal.com/g/gambling/ http://definitions.uslegal.com/g/gambling/

shawabawa3 10y ago
> This is not a contest of chance It's absolutely a contest of chance. There's no skill at all, you're betting on the probability nobody else will bid in the next 15 seconds. If this is considered a game of skill I have no idea how you could defend sportsbetting or poker being gambling
- bigtunacan 10y ago
  I agree there is no skill involved, but it is not a contest of chance either. Assuming the house is not cheating and using shill accounts (which does happen, but IS illegal) then the last person to continue bidding wins. So in that regard it is by definition not chance. You just continue to bid until no one else bids and then you win.
- ryporter 10y ago
  Not knowing what your opponent will do does not make it a game of chance. For the purpose of defining gambling, the component of chance must be exogenous to the participants.
  - dragonwriter 10y ago
    > For the purpose of defining gambling, the component of chance must be exogenous to the participants. There are many different legal definitions of gambling (even in the US -- each state that regulates gambling has at least on definition of its own, as well as the feds, and the same jurisdiction may have different definitions in different laws) but the one you posted upthread requires only that the future contingent event on which one participant is at risk be out of control of that participant, not that it must be "exogenous to the participants".

kharms 10y ago

As others mentioned, placing a bid on eBay doesn't cost you anything. More importantly, these penny auctions lack is transparency. The argument is that they're not gambling because it's a game influenced by skill, but for that to be true you would need transparency into who many bids have been made, by which people, with what timing. This doesn't appear to be possible without running an aggregation script.

0xcde4c3db 10y ago

Not sure where to find a reference, but ISTR it's been shown that the bidding sequence in penny auctions is functionally indistinguishable from a random process (provided that bidders aren't colluding to throw the auction to a predetermined winner), in much the same way that die rolls or coin flips are functionally random even though they're determined by a person applying mechanical forces. And unlike conventional auctions, all bidders end up paying. They don't pay the final "auction price", but they do pay a fee for placed bids. So the practical upshot is that this functions like a raffle or lottery, with the "auction" elements basically being window dressing.