3 ms·

I'm not sure how this is different from any auction at eBay, Christie's, Philips, or your local car auction.

jerf 18y ago
For the purposes of this message, I define "pay" as "money out of your pocket, including the money spent 'purchasing' 'bids'." In a real auction, if you are willing to pay twice the market price, you are almost (but not quite) guaranteed to win, and you will almost (but not quite) certainly be paying less than 2x market value. The only person who can beat you is someone willing to pay 2x+change. (When you lose, you don't have to pay anything, but that's not directly related to your point.) In a Swoopo auction, if you are willing to pay twice the market price, you are only slightly more likely to win, rather than reasonably assured, and you can be beaten by anybody willing to put up $1+current bid, which, if you've poured twice market value into the bids, is still fairly low. (And when you lose, you still pay.) An auction has a rational mechanism for manipulating the probability of your winning in proportion to your desire to win, as expressed by the money you're willing to pay. Swoopo's system is far, far less rational, and you can pour massive resources into an "auction" and be beaten at the end by somebody paying a mere fraction of what you are paying, even though they end up with the product. It's a night-and-day difference. One system is rational and what most would consider mostly fair. One is crazy and what most would consider a scam.
- owkaye 18y ago
  "One system is rational and what most would consider mostly fair. One is crazy and what most would consider a scam." The term "scam" requires that the person being scammed was not given the facts upfront. This is not a scam by any stretch of the imagination since the company posts the technical details plainly and clearly on their website. You may not like the way the business is structured, but it is certainly no scam.
  - jerf 18y ago
    Well, there's two aspects to that. One is that they tell you exactly how it works. The other is the marketing, where they all but promise you cheap goods. Is it a scam? Is an advertisement for a beer a scam when it promises you women will throw themselves at you if you drink their product? You can play the internet "difference minimization through copious verbiage" game all you like, but I still think there's a qualitative difference.

jerf 18y ago

For the purposes of this message, I define "pay" as "money out of your pocket, including the money spent 'purchasing' 'bids'." In a real auction, if you are willing to pay twice the market price, you are almost (but not quite) guaranteed to win, and you will almost (but not quite) certainly be paying less than 2x market value. The only person who can beat you is someone willing to pay 2x+change. (When you lose, you don't have to pay anything, but that's not directly related to your point.) In a Swoopo auction, if you are willing to pay twice the market price, you are only slightly more likely to win, rather than reasonably assured, and you can be beaten by anybody willing to put up $1+current bid, which, if you've poured twice market value into the bids, is still fairly low. (And when you lose, you still pay.) An auction has a rational mechanism for manipulating the probability of your winning in proportion to your desire to win, as expressed by the money you're willing to pay. Swoopo's system is far, far less rational, and you can pour massive resources into an "auction" and be beaten at the end by somebody paying a mere fraction of what you are paying, even though they end up with the product. It's a night-and-day difference. One system is rational and what most would consider mostly fair. One is crazy and what most would consider a scam.

owkaye 18y ago
"One system is rational and what most would consider mostly fair. One is crazy and what most would consider a scam." The term "scam" requires that the person being scammed was not given the facts upfront. This is not a scam by any stretch of the imagination since the company posts the technical details plainly and clearly on their website. You may not like the way the business is structured, but it is certainly no scam.
- jerf 18y ago
  Well, there's two aspects to that. One is that they tell you exactly how it works. The other is the marketing, where they all but promise you cheap goods. Is it a scam? Is an advertisement for a beer a scam when it promises you women will throw themselves at you if you drink their product? You can play the internet "difference minimization through copious verbiage" game all you like, but I still think there's a qualitative difference.